European markets flat, anticipating first ECB rate hike in over a decade

LONDON — European stocks were little changed on Thursday as the region’s investors awaited the European Central Bank’s latest monetary policy decision, in which it’s widely expected to announce its first interest rate hike in years.

The pan-European stoxx 600 hovered around the flatline in early trade, with media stocks adding 1% while banks dropped 0.4%.

The European Central Bank’s policy meeting in Frankfurt on Thursday is at the forefront of investors’ minds, with policymakers having given advance notice of a first hike in 11 years. Still, this comes against a backdrop of slowing growth, the war in Ukraine and threats to energy supplies.

The ECB will publish its monetary policy decision after the meeting of the central bank’s governing council. A press conference will follow at 14:45 CEST with ECB President Christine Lagarde. In June, the central bank said that it intends to raise the key ECB interest rates by 25 basis points at today’s meeting.

Italy has been plunged into fresh political uncertainty with Prime Minister Mario Draghi expected to tender his resignation Thursday after a number of parties in the governing coalition abstained from a vote of confidence that was aimed at renewing and re-uniting the fractious alliance.

Draghi won the vote but many senators refused to take part bringing the national unity government to the brink of collapse. Early elections could now take place in September or October.

Price rises continue to overshadow the region. On Wednesday, data out of the U.K. showed inflation hit yet another new 40-year high in June as food and energy prices continued to soar, escalating the country’s historic cost-of-living crisis.

Earnings on Thursday came from Roche, ABB, Givaudan, SAP, Ocado and AngloAmerican.

CNBC