European stock markets got off to a positive start on Thursday as traders awaited the Bank of England’s (BoE) latest rates meeting.

In London, the FTSE 100 (^FTSE) rose 0.4% after opening, while the French CAC (^FCHI) advanced 0.6% and the DAX (^GDAXI) was 0.7% higher in Frankfurt.

While the Bank is expected to keep interest rates at their current record lows of 0.1%, economists are anticipating that it could signal a tapering of bond-buying support, following a similar move at the US Federal Reserve last night.

“There has been a bang crash wallop of troubling economic signs this week, which may keep tensions high around the table at the Bank of England’s monetary policy committee today,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.

“Members know full well that the economy needs to be weaned off the drug of cheap money, not least to give them options to treat any future crises and to keep a lid on inflation. But an interest rate rise any time soon, could tip many borrowers over the edge and into more debt, and put a further break on recovery.”

On Wall Street, S&P 500 futures (ES=F) were up 0.4%, Dow futures (YM=F) gained 0.5%, and Nasdaq futures (NQ=F) were 0.3% higher as trade began in Europe.

Last night, the US Federal Reserve said it could hike rates six to seven times by the end of 2024, illustrating the central bank’s optimism that the COVID-19 recovery will progress well enough to tighten its easy money policies in a few years.

The policy-setting Federal Open Market Committee still held interest rates at near-zero in its updated statement, but said it had advanced talks on paring back its asset purchase program.

Michael Hewson of CMC Markets said: “Powell’s press conference came across as much more hawkish as he outlined the beginning of the process of a tapering of asset purchases this year.

“In its statement the Fed stated that “if progress continues broadly as expected, the Committee judges a moderation in the pace of asset purchases may soon be warranted”.”

Stocks in Asia were mixed overnight after some positive news from beleaguered property developer Evergrande Group in China. Investors remain cautious about the company’s future, looking in particular to a $83.5m dollar-bond interest payment due later on Thursday.

On Wednesday it said that payment due for an onshore renminbi-denominated bond, had “already been resolved through off-exchange negotiations.”

In Japan, the Nikkei (^N225) sank 0.7% while other key markets gained. The Hang Seng (^HSI) rose 1% and the Shanghai Composite (000001.SS) climbed almost 0.4%.

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