11:57 AM EDT, 08/29/2025 (MT Newswires) -- European stock markets closed lower in Friday trading as the Stoxx Europe 600 fell 0.57%, Germany's DAX lost 0.50%, the FTSE 100 declined 0.32%, France's CAC dropped 0.76%, and the Swiss Market Index was off 0.26%.

In Germany, the annual inflation rate is expected to be 2.2% in August, up from 2.0% in July, according to the Federal Statistical Office, while monthly inflation is expected to rise 0.1%. Analysts expected an inflation rate of 2.1%, according to Bloomberg. The core inflation rate, which excludes food and energy, is expected to be 2.7%, the FSO said.

The FSO also reported that adjusted retail sales declined 1.5% in July, while non-adjusted prices were down 1% compared with the previous month. Compared with a year earlier, adjusted retail sales increased 1.9% while non-adjusted prices rose 3.1%.

In France, annual inflation rose an estimated 0.9% in August, after rising 1.0% in July, according to provisional figures from the Institute for Statistics and Economic Studies, which expects monthly inflation to increase 0.4% in August.

INSEE also reported that Q2 real gross domestic product grew 0.3% from the previous quarter as a 2.4% decline in energy spending was offset by rising spending on food products.

And in corporate news, Telefonica's 10 million euro ($11.7 million) fiber-optic service contract with the Spanish government was cancelled due to the use of equipment made by China's Huawei, Reuters reported Friday, citing the nation's digital transformation ministry.

"We confirm the cancellation of the contract for reasons of digital strategy and strategic autonomy," the report quoted the ministry as saying in an emailed statement.

Telefonica did not immediately respond to a request for comment from MT Newswires.d

Shares of the Spanish telecommunications operator gained 0.28% in Madrid.

Bank stocks tumbled in London after the Institute for Public Policy Research, a British think tank, recommended the UK government levy a new tax on commercial banks to address the costs of quantitative easing.

"The UK taxpayer is spending 22 billion pounds ($29.6 billion) a year compensating the Bank of England for losses on its QE program, public money which is partly being funneled to commercial bank shareholders," the group said in a statement Friday.

NatWest Group shares shed 4.4% on the FTSE 100, while Lloyds Banking and Barclays dropped 3.1% and 2.1% respectively.

Apple believes that the UK's plans to increase competition in the mobile operating system market may harm users and developers, and could force the US giant to share its technology with foreign competitors for free, Reuters reported Thursday, citing an Apple spokesperson.

"We're concerned these EU-style rules the UK is advancing are bad for users and bad for developers," the report quoted the spokesperson as saying.

Apple did not immediately reply to MT Newswires' request for comment.

And luxury stocks slumped in Friday trading as The STOXX Europe Luxury 10 index, which tracks European luxury goods stocks, was down more than 1%. Shares of Pernod Ricard dropped 3.2% in Paris, followed by Kering and Louis Vuitton, which lost 2.5% and 1.8%, respectively. Hermes International declined 1.6%, while shares of Burberry were 2.4% lower in London.