European stocks open higher; Munich Re down 7%
We’re around 30 minutes into Friday’s trading session, and stocks are broadly marginally higher.
The pan-European Stoxx 600 was last seen trading around 0.1% higher. London’s FTSE 100 and the French CAC 40 are up 0.1% and 0.3%, respectively, while Germany’s DAX is down by 0.2%.
Shares of German reinsurer Munich Re are down 7.3% after the company trimmed its insurance revenue forecast, citing currency headwinds and business developments.
Munich Re share price
Markets expect Bank of England to hold rates steady
General view of the Bank of England and the Bank of England’s Prudential Regulation Authority (PRA) in March 2025.
Sopa Images | Lightrocket | Getty Images
Markets are now pricing in a more-than 90% probability the Bank of England keeps rates where they are at its next meeting.
Some analysts disagree. Capital Economics says it expects the central bank to keep cutting at every meeting until it reaches a 3% base rate next year because it disagrees with its inflation forecasts, and says “it’s only a matter of time” before labor market weakness leads to wage growth and inflation coming back down toward the Bank’s target.
But the firm says it’s “less confident that the next cut will come in November after the Bank’s change in tone.”
Economists at Santander UK are firmly in the opposite camp, with the lender citing “ugly inflation optics” and Chancellor Rachel Reeves’ upcoming budget as reasons it doesn’t see another cut before the end of the year.
Meanwhile, Barclays has a November cut as its base case, flagging the risk of Reeves’ potential budget measures dragging on GDP growth and pulling inflation lower.
— Jordan Butt
Munich Re adjusts earnings forecast
Shares of Munich Re are lower in pre-market trade, after the reinsurer lowered its insurance revenue forecast for 2025. The group cited foreign exchange and business developments, but second-quarter net profit still came in above expectations.
— Michael Considine
The UK government won’t admit it, but tax rises are coming
Britain’s Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves on June 23, 2025.
Jacob King | Pool | Afp | Getty Images
The U.K. government is loathe to admit it, but economists say it’s highly likely that the Treasury will have to hike taxes in the fall if it is to bung a black hole in the public finances that it has effectively created for itself.
The National Institute of Economic and Social Research (NIESR) is the latest economic think tank to warn that taxes would have to rise later this year if British Chancellor Rachel Reeves is to meet her self-imposed “fiscal rules.”
Read more from CNBC’s Holly Ellyatt here.
What’s been happening in global markets
A street sign is seen near the New York Stock Exchange (NYSE) in New York City, New York, U.S., August 7, 2025.
Eduardo Munoz | Reuters
Opening calls
An aerial view of central London.
Henry Nicholls | Afp | Getty Images
Hello from London.
Regional indexes look set for a muted open this morning, with futures tied to the FTSE 100 and Germany’s DAX trading flat, while those tied to the French CAC 40 were last seen trading 0.2% higher.
Euro Stoxx 50 futures are little changed.
European shares ended Thursday’s session higher after Moscow confirmed Russian President Vladimir Putin was scheduled to meet with U.S. counterpart Donald Trump within days.
— Chloe Taylor
