London: European stocks closed higher on Wednesday as encouraging corporate earnings announcements and data showing a smaller-than-expected increase in United Kingdom (UK) consumer price inflation countered concerns over rising US-Iran tensions and escalating oil prices.

According to Nam News Network, oil prices increased following the US military's 11th consecutive night of strikes against Iran, with President Trump threatening to bomb Pickaxe Mountain. Iranian media reported explosions in Bushehr, location of the Iranian nuclear power plant, adding to the geopolitical tensions.

The pan-European Stoxx 600 index rose by 0.58 per cent. The UK's FTSE 100 saw a significant gain of 1.24 per cent, while Germany's DAX increased by 0.58 per cent, and France's CAC 40 surged by 0.89 per cent. Switzerland's SMI edged up by 0.12 per cent. Meanwhile, other European markets including Austria, Belgium, the Czech Republic, Finland, Greece, Iceland, the Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, and Turkey also closed higher, though Denmark and Ireland ended lower.

In economic developments, data from the Office for National Statistics indicated that UK consumer price inflation slowed in June to its lowest level since March of the previous year, rising 2.6 per cent year-on-year, compared to 2.8 per cent in May. Analysts had expected a 2.7 per cent increase. On a monthly basis, consumer prices increased by 0.1 per cent, aligning with expectations, following a 0.2 per cent rise in May. Core inflation, which excludes energy, food, alcohol, and tobacco, held steady at 2.6 per cent in June.

Additionally, the Office for National Statistics reported that output price inflation decreased to 3.5 per cent in June from 3.7 per cent in May. Input price inflation also showed a decline, dropping to 7.3 per cent from 9.3 per cent in the previous month.