Europe open: Shares open higher as BoE rate move in focus

European shares opened higher on Thursday as investors awaited the Bank of England's policy rate decision due later in the day and US President Joe Biden's warning of recession if the nation’s $31.4 trln debt ceiling impasse was not resolved.

The pan-regional STOXX 600 index was up 0.53% in early trade. Asian stocks were largely lower on deflationary fears in China. Markets were also digesting data on Wednesday that showed the slowest rise in annual US consumer inflation in two years.

US inflation rose 4.9% in April from a year ago, less than the 5% expected. The Bank of England’s next monetary policy is expected to see borrowing costs lifted for the 12th consecutive meeting, with analysts widely expecting a 25 basis point rate hike to 4.5%.

In a campaign-style speech in a swing district in New York state on Wednesday, Biden accused Republicans of holding the economy hostage by demanding “devastating” spending cuts in exchange for raising the debt limit.

“We’re bringing jobs back all across America,” Biden said. “This is no time to put all this at risk, to threaten a recession, to put at risk millions of jobs, to undermine America’s standing in the world.”

In equity news, shares in aircraft engine maker Rolls-Royce fell as the company held annual guidance. The stock has been one of the star performers so far this year, posting gains of 60% after full year results and a hike in profit guidance.

Dutch bank ING Groep gained after reporting better than expected first-quarter profit, helped by rising interest rates and modest risk costs.

German conglomerate Thyssenkrupp fell as it posted a second-quarter net loss, but raised guidance for free cash flow.

Reporting by Frank Prenesti for Sharecast.com