Europe close: Stocks mostly higher ahead of Fed policy decision
Eurozone stocks were mostly higher as investors weighed a batch of economic data and showed optimism ahead of the Federal Reserve’s latest policy decision.
US inflation rose by 1.7% year-on-year in August, cooling from the previous month's 2% gain, the Labor Department revealed on Wednesday. Analysts had expected it to fall to 1.9%.
The data is likely to ease pressure on the Federal Reserve to raise interest rates. The Fed, which is targeting inflation of 2%, is expected to keep rates unchanged but slash $10bn off its monthly bond purchases when it wraps up its two-day policy meeting after the end of the European session.
In the UK, unemployment claims in the UK dropped by 37,000 in August, according to the Office for National Statistics (ONS). The consensus estimate had been for a fall of 30,000.
The unemployment rate retreated to 6.2% over the three months to July from 6.4% over the preceding three months, better than the 6.3% rate that economists had pencilled in.
In the three months to July, UK employers added 74,000 jobs, compared to forecasts of 120,000 and 167,000 in the previous three months.
Meanwhile, the Bank of England's minutes of its 3-4 September meeting revealed officials Martin Weale and Ian McCafferty voted for a 25 basis-point increase in the interest rate. A majority voted to keep the key rate at 0.5%, citing increased risks from Europe and muted inflation pressures.
In the Eurozone, inflation was revised up to 0.4% in August from initial estimates of 0.3%, surprising analysts who expected it to remain unchanged but still well below the European Central Bank’s target of just below 2%.
Looking ahead to Thursday, the market is bracing for the referendum on Scotland’s independence from the UK. Polls have shown the vote is too close to call.
Air France, DS Smith
Air France-KLM Group advanced after France’s prime minister asked its pilots to end a strike.
DS Smith gained after the maker of recycled packaging said sales in the months since 1 May were ahead of the same period a year ago.
Ebro Foods was higher as UBS raised its rating on the Spanish maker of rice and pasta products to ‘buy’ from ‘neutral’.
Cie. Financiere Richemont SA declined after reporting a rise in five-month sales that trailed estimates.
The euro fell 0.05% to $1.2954.
Brent crude futures dropped 0.15% to $98.90 per barrel, according to the ICE.