The Bank of England is expected to raise rates again to tackle rising inflation. Photo: Getty.

European markets and the FTSE 100 opened higher on Thursday as investors await the latest Bank of England (BoE) decision on interest rates and digest US inflation figures.

The FTSE 100 (^FTSE) rose 0.22% to 7,758.05. The CAC 40 (^FCHI) in Paris climbed 0.63% to 7,407.74 points – and in Germany, the DAX (^GDAXI) also moved higher, up 0.34% to 15,953.99.

RELX (RELX) and Pearson (PSON.L) were trading at the top of the UK index, while Rolls Royce (RR.L) and Tesco (TSCO.L) were at the bottom of the basket.

US and Asia markets

In Asia, the major markets were mixed overnight.

Tokyo’s Nikkei 225 (^N225) rose 0.02% to 29,126.72 points, while the Hang Seng (^HSI) in Hong Kong declined 0.77% to 19,609.35. In mainland China, the Shanghai Composite (000001.SS) was also in the red, down 0.29% to 3,309.50 points.

In the US, Wall Street also finished mixed, with the Dow edging lower and the S&P 500 slightly higher, while the Nasdaq rose on a tech-led rally amid cooler-than-expected US April CPI data, strengthening the odds for the Fed to pause rate hikes in its next meeting.

Google’s announcement of an AI-in-search folding phone further fuelled buying activity.

The Dow Jones (^DJI) fell 0.09% to 33,531.33 points, the S&P 500 (^GSPC) climbed 0.45% to 4,137.64 points - and the tech-heavy NASDAQ (^IXIC) gained 1.04% to 12,306.44.

Pound

The pound (GBPUSD=X) declined against the US dollar by 0.22% to 1.25 ahead of the BoE interest rate decision. Against the euro, the sterling (GBPEUR=X) was up, however, by 0.21% to 1.15.

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Oil prices

In commodities, crude prices were back in the green on Thursday.

US crude oil, or West Texas Intermediate (CL=F), rose 0.51% to $72.93 a barrel, while Brent crude (BZ=F) climbed 0.54% to $76.82 a barrel.

Economic data

High on the agenda today will be a decision on interest rates by the Bank of England (BoE) at noon.

The BoE is expected to raise UK interest rates to the highest level since 2008 with another 25 basis point increase.



Investors will also be looking toward the US producer price index report due later.

Meanwhile, US inflation was slightly weaker than forecast in April with consumer price inflation dipping to an annual rate of 4.9%, its lowest level since April 2021. Economists had expected it to remain steady at 5%.

“Annualised inflation coming in slightly below expectations at 4.9% compared to the 5.0% forecast might raise some hope that while this data does not spell out that Fed officials will be leaning towards providing guidance that the US central bank can begin communicating that lower interest rates are eventually returning, the economic release also does not imply that the Fed needs to raise interest rates higher either,” Jameel Ahmad, chief analyst at CompareBroker.io, commented.

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Ahmad also said anyone hoping for this economic release to provide guidance on the future outlook of US interest rates will have had their hopes dashed.

“Similarly to the monthly employment report released at the end of last week, the inflation headline number coming in today allows the Fed to continue to bide its time and wait for clarity from future economic data releases over the coming months,” he added.

Company news

Meanwhile, earnings are set to come from ITV (ITV.L), Bayer (BAYN.BE), Deutsche Telekom (DTE.DE), Merck (MRK), RWE (RWE.DE) and Prada (PRDSY) today.

Watch: Bank of England expected to raise interest rates for 12th time in a row

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