European markets higher as investors digest UK growth, cooler-than-expected U.S. inflation

LONDON — European stocks were higher Thursday, maintaining the week’s positive momentum as investors digest cooler-than-expected inflation readings in the U.S and U.K.

The regional Stoxx 600 index was up 0.2% at 9:38 a.m. in London, with healthcare stocks leading gains, up 0.5%.

European markets closed higher Wednesday as investors assessed key inflation prints from the U.S. and U.K. U.K. inflation rose to 2.2% in July, coming in slightly below expectations but inching back above the Bank of England’s 2% target, data from the Office for National Statistics showed.

Later in the day stateside, stocks climbed after the U.S. consumer price index reflected a slowing annual inflation rate of 2.9%, the lowest since 2021.

The U.S. data — coupled with a key measure of wholesale inflation released Tuesday that rose less than expected — has reassured investors that an economic soft landing is back on the table.

Investors are now assessing whether the prints point to an interest rate cut of 25 or 50 basis points by the U.S. Federal Reserve in September. Market pricing suggests a 58.5% probability of the former and a 41.5% probability of the latter, according to CME’s FedWatch tool.