European Stocks Decline Amid Central Bank Announcements

Investor sentiment sours as central banks in the UK and US maintain interest rates, affecting market performance.

European stock markets experienced a decline on Thursday as investors analyzed the implications of pronouncements from central banks in the United Kingdom and the United States.

The FTSE 100 index in London fell by 4.67 points, or 0.05%, concluding the day at 8,701.99. In contrast, indices across the continent fared worse, with France’s CAC 40 decreasing by 0.95% and Germany’s DAX dropping by 1.24%.

Both the Federal Reserve and the Bank of England announced their decisions to maintain interest rates, which came as little surprise to market participants.

The central banks cited economic uncertainty stemming from U.S. tariff policies as a significant factor influencing their cautious outlook.

The Federal Reserve also revised its projections for economic growth downward while increasing its inflation forecasts.

Despite the tempered economic outlook, U.S. markets initially opened higher.

By the close of European markets, however, the S&P 500 was down 0.2%, while the Dow Jones Industrial Average noted a slight uptick of 0.1%.

Russ Mould, an investment director at AJ Bell, noted that the unchanged interest rates were anticipated, and the Fed’s cautious position regarding growth forecasts reflected underlying economic concerns.

In currency markets, the British pound exhibited a decline of approximately 0.3% against the U.S. dollar, trading at 1.297.

Conversely, it gained around 0.2% against the euro, with a rate of 1.195.

In corporate news, shares of Wickes experienced an increase after the retailer reported a positive start to trading for 2025, bolstered by expectations of improved consumer confidence and a reduction in interest rates.

Despite a decline in profits for 2024 relative to the previous year, Wickes closed 6.1% higher.

Bloomsbury, the publisher known for the Harry Potter series, also saw its shares rise by 3.5% following a report indicating that its performance for the year ending in February exceeded analyst expectations.

The acquisition of Rowman & Littlefield last year contributed positively to its non-consumer division results.

Among the biggest risers on the FTSE 100 were SSE, which increased by 47p to 1,568.5p, Prudential, up 22.6p to 796.8p, and London Stock Exchange, which rose by 300p to 11,250p.

Notable declines were seen in Pearson, down 72.5p to 1,197.5p, M&G, decreasing by 8.6p to 217p, and Compass Group, which fell by 92p to 2,408p.