European Markets Rise as UK Inflation Cools, Sterling Slips Ahead of Central Bank Decisions

European stock markets opened broadly higher on Wednesday as investors positioned themselves ahead of a busy week of central bank policy decisions across the region. Major indices across France, Germany, Italy and the U.K. recorded early gains, reflecting cautious optimism despite lingering global economic uncertainty.

Market attention is firmly on the European Central Bank, which is expected to keep interest rates unchanged at 2% when it holds its final policy meeting of the year on Thursday. ECB President Christine Lagarde has signalled that the bank may revise its euro zone growth outlook upward again, after raising its 2025 GDP growth forecast to 1.2% in September.

Other major central banks are also in focus this week, including the Bank of England, Sweden’s Riksbank, and Norway’s Norges Bank. The Bank of England is widely expected to cut interest rates by 25 basis points to 3.75%, as sluggish economic growth and early signs of rising unemployment weigh on the outlook.

Meanwhile, fresh data showed that UK inflation cooled to 3.2% in November, down from 3.6% in October, easing pressure on policymakers. The softer inflation print pushed the British pound lower, with sterling sliding about 0.6% against the U.S. dollar and weakening modestly against the euro, while UK government bond yields were little changed.

Globally, sentiment remained mixed. U.S. stock futures edged lower after the S&P 500 posted its third consecutive losing session, as investors digested labor market data from the U.S. Bureau of Labor Statistics showing job losses in October followed by moderate gains in November. In Asia-Pacific, markets traded unevenly as investors assessed Japan’s latest trade figures, adding to a cautious but active global trading session.

source: cnbc