Europe midday: Stocks mostly flat, euro jumps against pound on BoE

European stocks are trading on a mixed note, with investors expected to focus on an interest rate decision from the Bank of England at noon in an otherwise light day in terms of economic events.

Just after noon in London the benchmark Stoxx 600 was down 0.14% to 395.90, while Germany's Dax, France's CAC 40 and Italy's FTSE Mibtel were all pretty much flat, though Spain's Ibex was down over 1%.

Meanwhile the euro/dollar was winding sideways at 1.0875, though the pound dropped 0.4% to €0.8433 and $1.289 after the Bank of England's Monetary Policy Committee released its statement and quarterly inflation report at midday.

The MPC revealed, as expected, that they were leaving all their key policy levers unchanged, though Kristin Forbes again dissented by voting for a 0.25% hike of the bank rate due to her concerns about inflation being above the 2% target.

The Committee's statement was more hawkish than last month, saying the UK may need a tighter policy that the yield curve currently implies, and the Bank raised its 2017 consumer price inflation forecasts to 2.7% from 2.4% and revised down its GDP growth forecast for this year to 1.9% from 2%.

The inflation report added support to the view that interest rates are set to rise sooner than markets expect, said Paul Hollingsworth at Capital Economics, as the Bank nudged up its forecasts for 2018 and 2019 from 1.6% and 1.7% to 1.7% and 1.8% respectively.

"Note that the MPC stated that interest rates may need to rise by a “somewhat greater extent than implied by markets” – the forecasts are based on rates rising in Q4 2019, although markets have pulled their expectations forwards to Q1 2019 in recent days. If we are right in thinking that the economy will maintain a solid pace next year, rather than slow as the MPC expects, then we think that the Committee should be in the position to take the first steps in “normalising” monetary policy around Q2 2018."

Meanwhile, oil prices were up, with Brent crude futures up 1.3% to $50.86 per barrel on the ICE.

Spain's Ibex was hit by pressured on telecoms giant Telefónica, which was down 3% after analysts expressed disappointment with first quarter results, despite lower costs and tax allowing seeing net profits beat estimates.

Spanish supermarket group DIA was down 4% after profits slid 6.4% in the period to March with debt jumping 20%.

Elsewhere, first quarter net profits at Unicredit beat analysts' forecasts, while Commerzbank is planning to slash the headcount at its corporate banking division by a third by 2020 as part of previously announced reductions, according to Handelsblatt reports.

Adidas announced it was to sell its TaylorMade unit to buyout group KPS Capital Partners for $425.0m.

Shares in Deutsche Post fell after the German postal and logistics firm confirmed its 2017 profit target,