The FTSE 100 (^FTSE) was muted after opening on Thursday, as traders awaited the latest decision on UK interest rates from the Bank of England (BoE).
Meanwhile, in the EU, the CAC (^FCHI) advanced 0.4% in Paris, and the DAX (^GDAXI) was 0.6% higher in Frankfurt.
“Today the Bank of England could make history by raising interest rates by 50bps for the first time since the Monetary Policy Committee (MPC) was set up back in 1997,” Michael Hewson of CMC Markets said.
“In June, the vote was a split decision, and it is quite likely that this one could be too.
“With the pound already down 10% year to date against the US dollar, the bank needs to act in a much more dynamic fashion to keep imported inflation in check, especially with the potential for another 50 or 75bps from the Federal Reserve next month.”
The BoE has increased interest rates for a record fifth time in a row in seven months so far. Interest rates currently stand at 1.25%, but the central bank could increase them to as much as 1.75%, according to the general consensus across financial markets.
It comes as Threadneedle Street looks to combat runaway inflation in the UK, warning that the rate at which prices are increasing could pass 11% later this year.
Read more: How Bank of England’s interest rate rise will affect mortgages and house prices
Across the pond, S&P 500 futures (ES=F) were flat, Dow futures (YM=F) climbed almost 0.1%, and Nasdaq futures (NQ=F) were treading water as trade began in Europe.
Investors will have their eyes on the latest US weekly jobless claims later today, which are set to show an increase of 260,000, continuing a trend that has seen claims hit a seven-month high.
Asian stocks rose overnight, taking their cues from a strong rally on Wall Street after robust economic data and upbeat corporate guidance boosted investor appetite.
In Tokyo, the Nikkei (^N225) climbed 0.7% while the Hang Seng (^HSI) surged 1.9% in Hong Kong, with an index of its tech stocks surging 2.3%.
The Shanghai Composite (000001.SS) gained 0.8% on the day.
Watch: How does inflation affect interest rates?
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