Regent street at Christmas time, London
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LONDON — European stocks were broadly higher on Wednesday as investors gear up for central bank decisions.
The pan-European Stoxx 600 was 0.3% higher by 1:10 p.m. in London (8:10 a.m. ET), with sectors mixed and most major bourses in positive territory.
London’s FTSE 100 led regional gains with a jump of 1.6% — putting it on course for its biggest daily gain in eight months. It came after inflation data published Wednesday showed that the U.K. inflation rate cooled to 3.2% in November, down from 3.6% a month earlier.
The index was lifted higher by financial services and homebuilder stocks, which reacted positively to the November inflation figures and the prospect of an interest rate cut from the Bank of England this week.
The BOE’s nine-member monetary policy committee is expected to trim interest rates by 25 basis points to 3.75%, given a backdrop of lackluster growth and signs that unemployment could be ticking higher.
Retirement savings firm Phoenix Group, last seen 4% higher, topped the FTSE 100 on Wednesday morning, and homebuilder Barratt Redrow, up 2.5%, was also among those seeing gains.
The British pound fell in the aftermath of the inflation print, and was last seen trading around 0.7% lower against the U.S. dollar.
British pound/U.S. dollar price
Against the euro, the pound lost around 0.4%.
Yields on British government bonds, known as gilts, fell across the curve following the inflation print. The yield on the benchmark 10-year gilt was last seen 3 basis points lower, while long-term 30-year gilts saw their yields move 2 basis points lower.
Bond prices and yields — which reflect how much interest the government pays on its debt — move in opposite directions. The U.K. currently has the highest long-term borrowing costs of any G7 nation, with its 20- and 30-year gilts trading with yields above the critical 5% threshold.
Central bank action across Europe will remain in focus this week, with the European Central Bank also set to hold its final policy meeting of the year on Thursday.
While the central bank is expected to keep rates at 2%, ECB President Christine Lagarde said it was likely to lift its euro zone growth forecasts again. In September, it had raised its annual GDP growth forecast to 1.2%.
Riksbank, and Norges Bank will also hold their last monetary policy decisions for 2025 this week.
Elsewhere, drinks giant Diageo announced Wednesday it was selling its 65% stake in East African Breweries to Japan’s Asahi Holdings for around $2.3 billion. Shares were last seen 0.5% higher.
Globally overnight, U.S. stock futures slid after the S&P 500 posted a third losing session Tuesday, as investors weighed the U.S. jobs landscape after the U.S. Bureau of Labor Statistics released data on Tuesday for both October (after the data was delayed due to the government shutdown) and November.
The data showed the U.S. economy shed 105,000 jobs in October, but that 64,000 jobs were added in November.
Asia-Pacific markets traded mixed Wednesday as investors parsed Japan’s trade data.
— CNBC’s Liz Napolitano contributed to this market report.
