European shares edged lower on Monday as higher oil prices following fresh U.S.-Iran attacks revived inflation concerns and strengthened expectations that the European Central Bank (ECB) could raise interest rates later this week. The pan-European STOXX 600 fell 0.1% to 649.17 points by 0711 GMT, while Switzerland’s main index dropped 1.2%. Novartis declined 3.3% after its experimental pelacarsen drug missed a key goal in a late-stage trial. Germany’s DAX was flat, while the far-right AfD won 44% of the vote in Saxony-Anhalt state elections, according to exit polls, dealing a major blow to Chancellor Friedrich Merz. Energy stocks rose 1.2% as Brent crude futures gained more than $1 a barrel following tit-for-tat U.S.-Iran strikes involving vessels in the Strait of Hormuz and other areas. The ECB is widely expected to raise rates by 25 basis points on Thursday. Investors are also awaiting U.S. CPI data after a strong jobs report increased expectations of a Federal Reserve rate hike this month, along with second-quarter euro zone economic data due later Monday. Trading volumes could be lighter because U.S. stock markets are closed for a public holiday.