LONDON: European stock markets opened lower Thursday after the Federal Reserve indicated it could hike interest rates again this year, and ahead of a knife-edge Bank of England decision.
London’s benchmark FTSE 100 index shed almost 0.6 percent to 7,686.62 points compared with Wednesday’s closing level.
In the eurozone, Frankfurt’s DAX index lost nearly 0.8 percent to 15,663.48 points and the Paris CAC 40 sank 1.1 percent to 7,250.01.
The Fed held US interest rates steady on Wednesday at a two-decade high, as expected, but indicated another hike is likely in 2023 to tackle inflation, with fewer cuts than anticipated in 2024.
Later on Thursday, the BoE could raise its key interest rate for a 15th straight time but the possibility of a pause has surfaced after a surprise dip in UK inflation.
“With the Fed out of the way, attention will now turn to the Bank of England,” said Deutsche Bank analysts in a note to clients. “Up until yesterday morning, it had been widely expected that the BoE would deliver another 25-basis-point hike.
“Markets are now only pricing in a 46-percent chance of a rate hike today, and it’s very finely balanced as we approach the decision.”
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