European stocks moved higher on Wednesday, lifted by growing confidence in a potential Federal Reserve rate cut in December and ahead of the U.K.’s Autumn Budget announcement.
By 03:02 ET (08:02 GMT), Germany’s DAX rose 0.6%, France’s CAC 40 gained 0.6%, and the U.K.’s FTSE 100 edged up 0.1%.
Fed Rate-Cut Expectations Support Markets
European shares tracked gains seen in Asia and on Wall Street as investors increasingly expect the Federal Reserve to cut rates at its December 9–10 meeting.
The S&P 500 advanced for a third straight session on Tuesday after U.S. data showed retail sales rising less than forecast and consumer confidence weakening—both developments strengthening expectations of upcoming policy easing.
According to the CME FedWatch tool, markets now assign an 82.7% probability to a 25-basis-point rate cut in December, up sharply from 43.4% just a week earlier.
U.K. Budget Takes Center Stage
Europe’s economic calendar is light on Wednesday, putting the U.K.’s Autumn Budget in the spotlight.
Finance Minister Rachel Reeves is expected to unveil tax increases aimed at maintaining financial market confidence ahead of an anticipated downgrade to Britain’s economic outlook.
“We expect Chancellor Rachel Reeves to raise taxes by about £38 billion, which will weigh on GDP growth, ease inflationary pressures, and contribute to further interest rate cuts,” said Ruth Gregory, Deputy Chief U.K. Economist at Capital Economics. She added that such a move would likely be welcomed by markets and reduce the need for more tax increases next year.
The Bank of England meets in mid-December and is widely expected to lower interest rates by 25 basis points to 3.75%, arguing that the U.K. economy will require additional support following the budget’s tax measures.
A YouGov survey for Citi added to this view, showing that inflation expectations among the British public fell to 3.7% in November from 4.2% in October. Longer-term expectations also declined to 3.9% from 4.2%.
AstraZeneca Gains After U.S. Drug Approval
Corporate news is limited on Wednesday, but AstraZeneca is likely to attract attention after U.S. regulators approved its cancer drug Imfinzi for treating certain operable stomach and gastroesophageal junction cancers in adults.
Oil Holds Near One-Month Lows
Oil prices steadied near their lowest levels in more than a month, though further declines remain possible amid an expected supply surplus and signs of progress toward a Russia-Ukraine peace agreement.
Brent crude slipped 0.1% to $61.75 a barrel, while U.S. West Texas Intermediate fell 0.4% to $57.90.
Both benchmarks settled lower on Tuesday after Ukrainian President Volodymyr Zelenskiy said he was willing to advance a U.S.-supported framework for ending the conflict with Russia—a move that could facilitate the return of Russian crude to global markets.
U.S. crude inventories fell last week, according to data from the American Petroleum Institute, while official figures from the Energy Information Administration are due later on Wednesday.
