European stock markets moved lower on Thursday, while a more positive mood across the pond weakened as investors digested comments from central banks in the UK and the US.
Another muted day of trading for London’s FTSE 100 saw the index dip 4.67 points, or 0.05%, to close at 8,701.99.
But it was still a stronger performance than European peers on Thursday, with France’s Cac 40 declining 0.95%, and Germany’s Dax dropping 1.24%.
There were little surprises for the financial markets in key monetary policy decisions, with both the Federal Reserve and the Bank of England opting to keep interest rates on hold.
Both central banks said they considered the impact of US President Donald Trump’s tariff policy, which had made the economic outlook significantly more uncertain.
The Fed also cut its outlook for economic growth and raised projections for price rises.
Despite the more tentative stance, US markets started the day higher.
But by the time European markets closed, the S&P 500 was down 0.2%, and Dow Jones was up 0.1%.
Russ Mould, investment director at AJ Bell, said: “No change to US interest rates was expected, as was a more cautious outlook with reduced growth forecasts.
“While no-one wants a weaker outlook, the key thing for markets is the Fed not delivering any negative surprises.
“Even a casual observer could have predicted the Fed’s stance on the trade war and its effects on economic activity, meaning markets were happy with what they heard.
“Central banks rely on data to support decisions and the Fed is in no rush to cut rates while the trade war is still in its infancy.”
The pound was down about 0.3% against the US dollar, at 1.297, and up about 0.2% against the euro, at 1.195,
In company news, shares in Wickes were given a boost after the retailer said it had seen a “good start” to trading in 2025.
The company was optimistic that improving consumer confidence and falling interest rates this year would boost sales over the coming year.
This is despite it reporting a drop in profits for 2024, compared with the prior year, amid tougher trading conditions.
Shares in Wickes closed 6.1% higher.
Bloomsbury shares also lifted higher on Thursday after the bookseller told investors its trading for the year to the end of February was ahead of analysts’ expectations, thanks to a strong performance over the second half of the year.
The Harry Potter publisher, which is due to publish its annual results in May, said its non-consumer division had been boosted by the acquisition of Rowman & Littlefield last year.
Shares in Bloomsbury rose 3.5%.
The biggest risers on the FTSE 100 were SSE, up 47p to 1,568.5p, Prudential, up 22.6p to 796.8p, Pershing Square, up 106p to 3,796p, Experian, up 97p to 3,616p, and London Stock Exchange, up 300p to 11,250p.
The biggest fallers on the FTSE 100 were Pearson, down 72.5p to 1,197.5p, M&G, down 8.6p to 217p, Compass Group, down 92p to 2,408p, Beazley, down 32.5p to 865.5p, and 3i Group, down 126p to 3,689p.
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