Europe close: Stocks end higher, but off best levels
European shares extended gains on Thursday after an upbeat assessment of the US economy from Federal Reserve chairman Jerome Powell overnight and despite an unexpected hike in UK interest rates.
The pan-European Stoxx 600 index finished up 1.23% to 476.56. The Bank of England's monetary policy committee (MPC) voted to raise rates from the historic low of 0.1% to 0.25%, judging that pressure from surging inflation outweighed the risks to the economy from the new variant.
UK inflation hit 5.1% in November amid soaring energy prices and global supply chain bottlenecks, hitting a rate the Bank hadn’t expected to be reached until the spring.
In the US, Powell indicated overnight that he would move on interest rates to keep inflation in check and flagged an end to its pandemic bond-buying programme.
For its part, the European Central Bank laid out plans for a gradual exit from its own emergency bond purchases over the course of 2022.
In equity news, Swiss drugs company Novartis gained 6% after launching a new share buyback of up to $15bn to be executed by the end of 2023.
Airbus rose 2% after Australia's Qantas Airways chose the European aircraft maker as the preferred supplier to replace its domestic fleet, switching from Boeing.
Shares in EDF fell more than 15% at after the French power giant cut its 2021 core profit guidance after the discovery of faults in a safety system at the Civaux nuclear power station.
The company also said late on Wednesday it had shut down another plant because it used the same kind of reactors.