Europe open: Stocks rise ahead of BoE rate announcement

European stocks rose in early trade amid expectations that the Bank of England will announce a rate cut later on Thursday.

At 0900 BST, the benchmark Stoxx Europe 600 index was up 0.9%, Germany’s DAX was 1.4% higher and France’s CAC 40 was up 1.2%.

Meanwhile, the FTSE 100 was up 0.7% as investors awaited the latest rate announcement from the Bank of England amid consensus expectations of a 25 basis points cut.

Lee Wild, heady of equity strategy at stockbroker Interactive Investor said the first interest rate cut since 2009 is not the cast-iron certainty it was a few days ago.

“One can understand why Mark Carney is so keen to give confidence a boost, but he's done that already with his own Big Bazooka story and both markets and the economy show no sign of imminent collapse. Using up our last ammunition shooting at shadows is not consistent with a Bank of England governor urging us to be prudent.

“With a new Prime Minister and Chancellor of the Exchequer only hours into the job, and a lack of quality data, Carney might be forgiven for holding off this time. Next month he'll be armed with the numbers that make up the Bank's quarterly Inflation Report.

“Equity markets are having none of it though, and are busily pricing in a 25 basis-point cut in rates to a record low 0.25%, extending the blue chip rally since 24 June to an incredible 950 points.”

New UK Prime Minister Theresa May has appointed former London Mayor Boris Johnson as Foreign Secretary, with Philip Hammond the new Chancellor and Amber Rudd Home Secretary.

In corporate news, information services firm Experian was in the black after it said revenue grew 5% at constant exchange rates in the first quarter.

Recruitment firm Hays surged after saying it expects full-year operating profit to be ahead of current market estimates at around £180m.

Food retailers Delhaize and Ahold were trading higher after agreeing to sell 86 US stores as they look to win approval from the US Federal Trade commission for their merger.

Oil prices advanced on a weaker dollar and following Wednesday’s drop. West Texas Intermediate was up 1.3% to $45.35 a barrel and Brent crude was 1.1% firmer at $46.78.