European stocks rise before UK rate decision

Europe's major stock markets rose Thursday as investors marked time before a Bank of England interest rate decision, and after a mixed performance in Asia.

In late morning deals, London stocks gained 0.2 per cent with the British central bank's monetary policy committee (MPC) forecast to hold rates at a record low 0.1 per cent at 1100 GMT.

In the eurozone, Frankfurt stocks climbed 0.8 per cent and Paris won 0.9 per cent, compared with Wednesday's close.

"Stocks seem to be largely marking time until there is more clarity on economic data like inflation with the major European bourses a little higher this morning," noted Markets.com analyst Neil Wilson.

"Sterling trades close to $1.40 ahead of the Bank of England. No change is expected but there are signs that inflation might run hotter than the MPC currently forecasts so we will be watching for any commentary around this."

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The BoE is the latest major central bank to weigh fears of spiking inflation against the need to nurture economic recovery from Covid.

Both the US Federal Reserve and European Central Bank kept their own ultra-low rates and economic support measures intact in recent weeks, insisting that high inflation is a temporary side-effect from the global rebound.

Back in Asia on Thursday, equities traded mixed as investors took a breather after the latest rally and attempted to assess when the Fed will begin to wind down its vast monetary easing programme.

After a troubled start to the week, equities across much of Asia have enjoyed healthy gains in the past two days as US central bank chiefs looked to temper fears that record-low interest rates and colossal bond-buying were in their final throes.

Traders have for months worried that the blistering global recovery will fan inflation and force officials to act.

And the Fed -- which has consistently said recent inflation spikes were temporary and it will maintain its policy as long as the economy needs -- last Wednesday suggested for the first time it could lift borrowing costs in 2023, a year earlier than initially targeted.

The past few days have seen a number of top officials try to tame expectations, which provided some solace, but traders remain nervous.

Oil climbs

Oil prices rose again, having dipped slightly after Saudi Arabia's energy minister Prince Abdulaziz bin Salman said OPEC and other major producers had a part in "taming and containing, by making sure that this market doesn't get out of hand".

The sharp rise in commodities this year has also played a key role in the global spike in inflation.

His comments come just ahead of the latest output policy meeting of the group and as crude prices sit around multi-year highs.

Oil has rallied this week to hit October 2018 peaks on Wednesday, propelled by hopes of a global demand recovery.

Key figures at 0930 GMT 

London - FTSE 100: UP 0.2 percent at 7,088.45 points

Frankfurt - DAX 30: UP 0.8 percent at 15,574.03

Paris - CAC 40: UP 0.9 percent at 6,610.39

EURO STOXX 50: UP 0.9 percent at 4,113.86

Tokyo - Nikkei 225: FLAT at 28,875.23 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 28,882.46 (close)

Shanghai - Composite: FLAT at 3,566.65 (close)

New York - Dow: DOWN 0.2 percent at 33,874.24 (close)

Euro/dollar: UP at $1.1927 from $1.1926 at 2100 GMT

Pound/dollar: UP at $1.3972 from $1.3964

Euro/pound: DOWN at 85.37 pence from 85.41 pence

Dollar/yen: DOWN at 110.86 yen from 110.96 yen

Brent North Sea crude: UP 0.4 percent at $75.45 per barrel

West Texas Intermediate: UP 0.3 percent at $73.27 per barrel