European Markets Slip as FTSE 100 Dips Amid Trade, Economic Uncertainty

European and UK markets showed cautious trading with slight declines amid ongoing trade tensions and economic concerns. The FTSE 100 traded flat to slightly higher, supported by a new UK-US trade deal reducing tariffs on British car and aerospace exports, boosting shares of Rolls-Royce and Auto Trader, though housebuilders like Barratt, Persimmon, and Taylor Wimpey underperformed due to weak housing market indicators and consumer demand worries. The European Central Bank Vice President highlighted subdued eurozone growth projections below 1% for 2025, reinforcing negative sentiment that led to declines in major European indexes including Italy's FTSE Mib, where manufacturing data worsened. UK mortgage approvals unexpectedly rose in May, signaling some housing market resilience, yet inflation remains a key concern affecting market dynamics and policymaker decisions. US President Donald Trump ruled out extending the July 9 tariff pause, maintaining pressure on trade negotiations that contribute to market volatility. Overall, while trade agreements provide some optimism, economic headwinds and geopolitical uncertainties keep markets tentative.