Published by Global Banking & Finance Review®
Posted on December 18, 2025
3 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe Bank of England is expected to cut rates, while other central banks hold steady. UK inflation drops, influencing market expectations.
A look at the day ahead in European and global markets from Tom Westbrook
Markets expect the Bank of England to be the only mover at a slew of central bank meetings on Thursday, with a 25-basis-point rate cut to 3.75% almost as predictable as the top order collapse at the Ashes test in Adelaide.
Wednesday's unexpected drop in UK inflation has reassured investors that policy easing is in the offing, though with the highest inflation among the G7 economies at 3.2%, further rate reductions are likely to be some ways off.
Sterling nursed losses at $1.3374.[GBP/][FRX/]
The European Central Bank is widely expected to keep rates steady at 2% and signal little appetite for cuts, and may increase its growth projections. Central banks in Sweden and Norway are also seen on hold at 1.75% and 4%, respectively.
On the corporate front British oil and gas major BP appointed Meg O'Neill, the head of Australia's Woodside Energy, as its next CEO as it looks to refocus on hydrocarbons after a detour into renewables.
Activist investor Elliott Management has amassed a stake of more than $1 billion in Lululemon Athletica and is lining up a potential CEO candidate, a source told Reuters.
In a rare evening address from the White House, U.S. President Donald Trump - facing sinking approval ratings - announced a $1,776 "warrior dividend" payable to 1.45 million U.S. service members.
More importantly for investors, Trump also said he would soon announce his pick for the next chair of the Federal Reserve, adding it would be "someone who believes in lower interest rates by a lot".
November U.S. inflation data is due later on Thursday, though it won't have a month-to-month comparison since October figures were not collected during the U.S. government shutdown.
In the markets AI jitters extended from Wall Street and Asian bourses were in the red while oil was up on reports of new U.S. sanctions on Russia and its Venezuela blockade.[MKTS/GLOB]
Texan cloud computing firm Oracle is a key focus of concern and shares dived 5.4% after it announced an equity deal to support a data center project would not include a key partner Blue Owl Capital.
The stock has shed almost 50% from mid-September when a deal with OpenAI sparked a 35% one-day rally.
In Tokyo the Bank of Japan began a two-day meeting that is expected to deliver a rate hike on Friday and the yen, which could be a focus of selling if markets are not convinced on further hikes, was steady around 155.75 per dollar.
Key developments that could influence markets on Thursday:
- Policy decisions at the Bank of England, European Central Bank, Riksbank and Norges Bank
- US November CPI
(Editing by Shri Navaratnam)
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic goals such as controlling inflation, consumption, growth, and liquidity.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the principal amount. They are influenced by central bank policies and economic conditions.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
Corporate governance refers to the systems, principles, and processes by which companies are directed and controlled. It encompasses the relationships among stakeholders and the goals for which the corporation is governed.
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
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