European markets begin neutral on Wednesday as investors analyse U.K. inflation statistics and impatiently await the latest Fed rate decision.

European stock markets are anticipated to begin neutral on Wednesday as investors analyse U.K. inflation statistics and impatiently await the latest Federal Reserve interest rate decision.

The bailout of failing lender Credit Suisse by its Swiss rival UBS played a significant role in improving sentiment in equities throughout the world. During the weekend, the Swiss government negotiated and approved a compromise.

The attention now shifts to a Federal Reserve interest rate decision later in the day, with central bank policymakers juggling battling inflation and calming a financial crisis.

Investors continue to anticipate the Fed to raise interest rates by 25 basis points, but there is much uncertainty about future monetary policy given that inflation is strong but concerns about the banking system's soundness may restrict the central bank's aggressive approach.

Consumer prices in the United Kingdom climbed 1.1% month on month in February, rising 10.4% year on year, indicating that inflationary pressures remain.

The Bank of England is scheduled to meet tomorrow and is anticipated to raise interest rates by another 25 basis points to 4.25%, while Governor Andrew Bailey has indicated that he may be willing to stop rate rises.

The ECB (European Central Bank) raised its benchmark interest rates by 50 basis points last week, and Bundesbank President Joachim Nagel warned additional rises were required to battle inflation.

Oil prices dipped on Tuesday as industry data showed another week of rising US stockpiles, indicating that fuel demand in the world's top consumer may be slowing.

The API said late Tuesday that oil stockpiles in the United States increased by 3.3 million barrels last week, surprising forecasts for a drop of around 1.6 million barrels.

If the official inventory data from the US EIA confirms a rise, stockpiles would have increased for 12 of the previous 13 weeks.

(Investing.com, Reuters.com)