European equity markets traded modestly higher on Wednesday as investors positioned themselves ahead of a busy schedule of central bank policy announcements, with softer inflation data providing particular support to UK stocks.
By 08:05 GMT, Germany’s DAX had gained 0.2%, France’s CAC 40 was up 0.2%, and the UK’s FTSE 100 outperformed with a rise of 0.8%.
Focus shifts to central bank meetings
Market attention this week is firmly centred on upcoming monetary policy decisions across Europe, as investors look for clarity on the direction of interest rates heading into the new year.
The European Central Bank is widely expected to keep its key interest rate unchanged at 2% when it meets on Thursday. Recent economic indicators suggest the eurozone economy has shown greater resilience than initially anticipated.
Despite pressure from U.S. President Donald Trump’s aggressive trade stance, the 20-country euro area has managed to absorb some of the impact of higher U.S. tariffs, partially offsetting weaker export performance. However, momentum has softened toward year-end, with manufacturing activity contracting further and growth in the services sector losing pace.
Later in the session, November eurozone CPI data is due for release, though it is not expected to materially affect ECB policy decisions.
Meanwhile, Sweden’s Riksbank and Norway’s Norges Bank are also set to announce their final policy decisions of 2025 this week. In the UK, inflation data published earlier in the day is likely to influence the Bank of England’s next move.
Annual UK consumer price inflation slowed to 3.2% in November from 3.6% in October, marking its lowest level in eight months. On a monthly basis, prices declined by 0.2%. The BoE narrowly voted 5–4 to keep rates unchanged last month, but easing inflation could increase the likelihood of a rate cut to 3.75% from 4%, which would be the lowest level since early February 2023.
Corporate updates in focus
On the corporate front, Thyssenkrupp Nucera (TG:NCH2) reported fourth-quarter results broadly in line with its November pre-release, with revenue slightly ahead of consensus expectations and earnings largely unchanged.
Serco (LSE:SRP) lifted its profit guidance for 2025 and delivered a constructive outlook for 2026, supported by strong trading across its government services operations.
Bunzl (LSE:BNZL) also updated the market, confirming that its adjusted operating profit for 2025 remains in line with expectations, despite persistent economic pressures in several key markets.
Oil prices jump after Venezuela announcement
Crude oil prices climbed sharply on Wednesday after President Trump ordered a total blockade of all sanctioned oil tankers entering and leaving Venezuela, raising concerns over potential supply disruptions.
Brent crude futures rose 1.4% to $59.73 per barrel, while U.S. West Texas Intermediate futures gained 1.5% to $55.94 per barrel.
Both benchmarks had fallen to five-year lows in the previous session, following reports of tentative progress in Russia-Ukraine peace negotiations and mounting worries about excess supply next year.
“Venezuela exported around 600k b/d of oil in November. It’s likely that these volumes will fall given the latest developments. The bulk of this oil is shipped to China,” ING analysts said in a note.
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