English
European stock markets close at record highs after UK rate cut
European stock markets closed higher on Thursday, February 6, with some hitting new record highs amid corporate earnings releases and the Bank of England cutting interest rates by a quarter point.
The pan-European Stoxx 600 index rose 6.28 points, or 1.17%, to 544.84 points at the end of trading, a new record high, with almost all sectors trading higher during the session.
The German DAX index also closed the session up 316.49 points, or 1.47%, to 21,902.42 points, its highest level ever.
The French CAC 40 index also rose by 115.94 points, or 1.47%, to close at 8,007.62 points.
The UK's FTSE 100 also rose 103.99 points, or 1.21%, at the close to 8,727.28, also hitting a new high.
This comes after the Bank of England cut interest rates by 25 basis points at its first meeting of 2025 on Thursday, to 4.5%.
All policymakers at the bank voted to cut rates, while two of the nine voting members favoured a larger cut of 0.5%. The market has almost fully priced in three further 25 basis point cuts this year.
"The unanimous decision to ease policy suggests that concerns among policymakers about the UK's faltering economy now outweigh concerns about rising inflation, opening the door for another rate cut sooner rather than later," said Suren Thiru, director of economics at the Institute of Chartered Accountants in England and Wales.
The Bank of England has cut its forecast for average annual growth in the UK economy for 2025 to 0.75% from 1.5%.
