European markets close higher following central bank bonanza

European stocks finished in positive territory on Thursday as traders positioned for central bank decisions today.

The pan-European Stoxx 600 was almost 1% higher at the close of the session.

Markets prepared for Europe’s central banks to announce their final interest-rate decisions of the year on Thursday with the European Central Bank, Bank of England, Riksbank and Norges Bank all concluding monetary policy meetings on Thursday.

The ECB kept rates at 2%, while Riksbank and Norges Bank also held steady.

The Bank of England reduced its interest rate from 4% to 3.75%, in a widely-anticipated move which brings the U.K. base rate to its lowest level in almost three years. The yield on the benchmark 10-year U.K. gilt was last seen down almost 1 basis point, at 4.474%, while yields on the two-year bond were last up 2 basis points to 3.734%.

Sterling was flat against the dollar after the announcement, as was the FTSE 100.

Norway’s central bank kept rates on hold at 4% on Thursday, with economists suggesting the next rate cut might not come until summer 2026. 

The bank said Thursday that the outlook is uncertain “but if the economy evolves broadly as currently projected, the policy rate will be reduced further in the course of the coming year.”