By Peter Nurse

Investing.com - European stock markets edged higher Friday, ending the week on a positive note despite the European Central Bank’s larger-than-expected interest rate as well as disappointing survey growth data.

By 04:15 AM ET (0815 GMT), the DAX in Germany traded 0.3% higher, the CAC 40 in France rose 0.2%, and U.K.’s FTSE 100 gained 0.3%.

The ECB raised interest rates by 50 basis points from zero percent on Thursday, its first hike in 11 years, ending a policy of negative interest rates that had been in place since 2014.

The hike was more than the 25 basis points increase that ECB President Christine Lagarde guided towards at the central bank’s June meeting, suggesting that the policymakers have become very concerned about inflation, with Eurozone CPI now at a record annual 8.6%, even at the expense of growth in the region.

The latest PMI survey data for the Eurozone suggested that growth is slowing in the region, even before the central bank has started to tighten monetary policy.

The key German manufacturing PMI release fell to 49.2 in July, dropping in contraction territory and its lowest level in 25 months, reinforcing predictions that Europe’s biggest economy is heading into a recession in the second half of 2022.

There was some relatively good news Friday, as U.K. retail sales fell by 0.1% on the month in June, a less steep decline than had been expected as the Queen's Platinum Jubilee boosted food and drink sales.

That said, this still represented an annual drop of 5.8%, as U.K. consumers reined in their discretionary spending in the face of a cost of living crisis.

In corporate news, Santander (BME:SAN) stock rose 1.5% after the Spanish lender dropped out of the process to buy Citigroup's (NYSE:C) Mexican retail bank after having previously submitted a non-binding offer earlier this year.

Sticking with the banking sector, Danske Bank (CSE:DANSKE) stock fell 3.7% after the Danish lender said it won’t make a 2021 dividend payment targeted for this quarter, saying that negotiations with U.S. and Danish authorities to end a money laundering scandal are still underway.

Norsk Hydro (OL:NHY) stock rose 3.8% after the Norwegian aluminum-maker said it would propose an extra dividend and offer share buybacks as it reported upbeat quarterly profits.

Stora Enso (OTC:SEOAY) stock slumped 8.6% after the Scandinavian forestry company posted weaker-than-expected quarterly earnings, citing logistics bottlenecks.

Schindler (SIX:SCHN) stock fell 3.5% after the Swiss elevator and escalator manufacturer cut its revenue guidance for the full year, citing China market contraction and COVID-related lockdowns.