European stocks rebounded on Friday after the hawkish outcome of the ECB meeting and better-than-expected ECB economic staff projections.

European Union energy ministers met on Friday to discuss how to tackle the energy crisis. The key point on the agenda was the price cap on Russian gas and oil.

Rising gas prices may force some European countries heavily dependent on supplies from Russia to introduce rationing as winter approaches, threatening industrial shutdown and recession in the region.

New UK Prime Minister Liz Truss announced plans to cap consumer electricity bills for 2 years and bail out energy companies, which could cost the country around £150bn ($290bn).

Despite the large interest rate hike, the ECB meeting was a risk-on event as the regulator downplayed recession concerns hinting at further tightening in the coming months in order to curb rampant inflation.

Data released on Friday showed that industrial production in France fell by 1.6% m/m in July, a sharper fall than -1.2% in the previous month.

Oil prices rose on Friday, rebounding from a 8-month low, but heading for a second consecutive weekly decline as sharp monetary tightening and COVID-19 lockdowns in China dampened demand.

Data released on Thursday by the US Energy Information Administration showed a significant increase in the oil inventories by 8.8 million barrels last week, more than what the American Petroleum Institute, the industry body, reported on Wednesday, raising doubts about the strength of US energy demand.