European stocks traded broadly higher Thursday, despite the U.K.’s FTSE 100 erasing gains following the announcement of a U.K.-U.S. trade deal and an interest rate cut by the Bank of England.
The pan-European Stoxx 600 was 0.24% higher at 4:06 p.m. in London, trimming earlier gains.
However, the U.K.’s FTSE 100 reversed gains earlier in the session to trade 0.34% lower at 4:10 p.m. in London. Sterling was slightly higher against the euro and U.S. dollar. See CNBC’s live coverage of the U.K.-U.S. deal announcement here.
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As the U.K. announced a strengthening of its trading relationship with Washington, the EU said it was preparing to launch a WTO complaint against the United States over the Trump administration’s tariffs regime.
“It is the unequivocal view of the EU that these [U.S.] tariffs blatantly violate fundamental WTO rules,” the European Commission said in a statement.
The bloc also said it was launching a public consultation on a list of U.S. imports worth 95 billion euros ($107.5 billion) that could be subject to new import duties as a part of EU retaliatory measures.
In London, the Bank of England on Thursday cut its key interest rate by 25 basis points, bringing it down to 4.25%. The central bank’s Monetary Policy Committee voted by a 5 to 4 majority to reduce rates by 25 basis points. Two of its members voted to cut rates by 50 basis points, while another two wanted to hold rates steady.
It came after Sweden’s Riksbank held its key interest rate steady, citing uncertainty in the global economy as a direct result of U.S. President Donald Trump’s trade policies. A day earlier, Norway’s central bank Norges Bank also kept interest rates unchanged, noting that “trade barriers have … become more extensive, and there is uncertainty about future trade policies.”
On the corporate front, earnings came from Maersk, Siemens Energy, Heidelberg Materials, Henkel, Infineon, Lanxess, Puma, Rheinmetall, Bosch, Norwegian Air, Swisscom, Zurich Insurance, Adecco Group, InterContinental Hotels Group and Banco Sabadell.
U.S. stocks rose Thursday after Trump’s comments on a trade deal with the U.K. Also in focus was the Federal Reserve’s latest policy decision — the U.S. central bank held steady on rates as it highlighted rising inflation and unemployment risks.
The Federal Open Market Committee held its benchmark overnight borrowing rate in a range of between 4.25% to 4.5%, where it has been since December. The decision was largely expected.
Fed Chair Jerome Powell warned in his press conference that if the significant tariff hikes already announced remain at current levels, they could lead to a slowdown in economic growth and an uptick in long-term inflation.
Asia-Pacific markets traded mixed overnight after the Fed’s decision, with investors awaiting updates on the upcoming U.S.-China trade talks. U.S. Treasury Secretary Scott Bessent and his Chinese counterpart are set to meet in Switzerland this week to address the countries’ deep trade dispute and economic issues.
