European stock markets are anticipated to begin sluggish on Thursday ahead of the Bank of England's policy-setting meeting.

European stock markets are anticipated to begin sluggish on Thursday as investors analyse the latest interest rate hike by the United States’s Fed ahead of the Bank of England's policy-setting meeting.

European shares are likely to follow Wall Street's bearish closing overnight, with the bellwether Dow Jones plunging more than 500 points.

The Fed raised its key interest rate by 25 basis points, as predicted, anticipating at least one more hike this year and stating that it has no plans to lower rates this year.

The central bank also reduced its forecast for annual GDP, citing the likelihood that the financial crisis may have an impact on growth.

But, Treasury Secretary Janet Yellen's statements that the government "is not considering guaranteeing all uninsured bank accounts" inflicted the most harm.

Earlier in the week, speculation of such a move increased confidence in the industry.

Elsewhere in Europe, the BoE meets later in the afternoon and is widely anticipated to follow the Fed's example with a 25-basis-point raise, particularly after U.K. inflation unexpectedly surged beyond 10% in February, according to statistics released on Wednesday.

EU leaders will also convene in Brussels for a two-day summit to discuss long-term strategies for competing with the US and China.

With the heavy losses on Wall Street overnight, the attention in the business sector will stay on the banking sector. Yet, the industry has done rather well in the aftermath of the European Central Bank's 50 basis point boost last week and the forced merger of UBS and Credit Suisse.

Oil prices dipped Thursday, halting a three-day surge, as the Fed raised interest rates, while crude oil stocks in the United States increased for the 12th time in the previous 13 weeks.

The Energy Information Administration said that crude oil stocks in the United States increased by slightly over 1 million barrels, reaching their highest level since May 2021.

(Investing.com, Ruters.com)