U.K. Prime Minister Keir Starmer leaves Downing Street on February 02, 2026 in London, United Kingdom.Alishia Abodunde | Getty Images News | Getty ImagesLONDON — European stocks closed sharply lower on Friday as inflation concerns returned to investors' minds following a week of hotter-than-expected U.S. price data and a jump in oil prices.The pan-European Stoxx 600 index finished the session 1.6% lower. Major bourses in London, Paris, Frankfurt and Milan were all down, while most regional sectors also closed the day in negative territory.The Magnum Ice Cream Company's Amsterdam-listed shares surged more than 8% amid reports that Blackstone and CD&R are among the firms mulling a private equity swoop for the group. The world's largest standalone ice cream maker spun out of Unilever late last year.Meanwhile, mining stocks were among those hit hardest by Friday's sell-off. Antofagasta and Fresnillo registered double-digit losses after gold sold off and oil prices ticked higher as hopes of a breakthrough in the Middle East peace negotiations appeared to fade. Antofagasta and Fresnillo both ended the session down about 10%.In the U.K., Prime Minister Keir Starmer faces a fresh battle for his premiership after his Labour Party rival Andy Burnham was offered a route to parliament on Thursday, paving the way for a leadership challenge.Burnham, the current Manchester mayor and the more left-leaning candidate, is not an MP but Labour MP for Makerfield Josh Simons announced he was resigning, paving the way for Burnham to run for the seat in a special election. Victory is by no means guaranteed, however, as Burnham will come up against a resurgent right-wing party Reform UK.Burnham is seen by the bond market as leaning more to the left — a factor that has sent borrowing costs higher, with investors fearing a less conservative prime minister could herald more borrowing and public spending, and higher debt.The pound clocked its fifth consecutive daily decline against the dollar after a week of political tumult, down 0.6% to 1.3317. The yield on 10-year Gilts, the benchmark for U.K. government debt, was more than 19 basis points higher in afternoon trade, at 5.185%.Shares in Europe are tracking Asian markets' overnight declines after South Korea's benchmark Kospi index slid more than 6% on Friday, retreating from a fresh record high above 8,000, as broader Asia-Pacific markets fell.Japan's Nikkei 225 declined about 2% and the Topix lost 0.4%. Hong Kong's Hang Seng index slid 1.6% while the CSI 300 dropped 1.1%. India's Nifty 50 was down 0.2%.Investors continued to watch developments from the U.S.-China summit, as the meeting between U.S. President Donald Trump and China premier Xi Jinping concluded Friday without any apparent major policy breakthrough. On Wall Street, the broad-based S&P 500 was down 1.1%, while the Dow Jones Industrial Average fell 1%, with the Nasdaq sliding 1.5% amid concerns over a resurgence in U.S. inflation.On Wednesday, April's U.S. producer price index rose 1.4%, the biggest monthly increase since March 2022 and also exceeding economists' 0.5% consensus estimate and the upwardly revised 0.7% March increase. On an annual basis, the index was up 6% — the biggest increase since December 2022.The report arrived a day after the Bureau of Labor Statistics reported that the April consumer price index rose 3.8% from a year ago, as surging energy prices compounded inflation by a surprise jump in shelter costs.Core inflation was more subdued at 2.8% but still well above the Federal Reserve's 2% goal, likely keeping central bankers on hold as the impacts from the Iran war and President Donald Trump's tariffs play out.— CNBC's Sean Conlon also contributed to this report.