Stock indices closed mixed as oil prices remained volatile.
The European Union (EU) Commission released it economic growth and inflation forecasts for the Eurozone on Thursday. Eurozone's economic growth for 2016 was cut to 1.7%, down from the previous estimate of 1.7%. Eurozone's economic growth for 2017 remained unchanged at 1.9%.
The EU Commission noted that there are risks to the outlook from the slowdown in emerging countries and possible further interest rate hikes in the U.S.
"Europe's moderate growth is facing increasing headwinds, from slower growth in emerging markets such as China, to weak global trade and geopolitical tensions in Europe's neighbourhood," EU Commission Vice President Valdis Dombrovskis said.
The EU commission lowered its 2016 inflation forecast for the Eurozone to 0.5% from 1.0%. Inflation is expected to be 1.5% in 2017.
According to the EU commission, inflation was driven by further drop in oil prices, but it was only temporary.
The European Central Bank (ECB) President Mario Draghi said in a speech on Thursday that it is better to act earlier than too late as the risks are too high.
"Adopting a wait-and-see attitude and extending the policy horizon brings with it risks: namely a lasting de-anchoring of expectations leading to persistently weaker inflation. And if that were to happen, we would need a much more accommodative monetary policy to reverse it. Seen from that perspective, the risks of acting too late outweigh the risks of acting too early," he said.
The Bank of England (BoE) released its interest rate decision on Thursday. The BoE kept its interest rates unchanged at 0.5% and its asset purchase program unchanged at £375 billion. This decision was widely expected.
The Bank of England's Monetary Policy Committee (MPC) released its February meeting minutes on Thursday. All members voted to keep the central bank's monetary policy unchanged. Ian McCafferty, who voted to hike interest rate by 0.25% since August 2015, changed his mind.
The BoE released its quarterly inflation report on Thursday. The central bank downgraded its growth forecasts. The economy is expected to expand 2.2% in 2016, down from its previous forecast of a 2.5% rise, and 2.3% in 2017, down from its previous forecast of a 2.6% gain.
"The MPC judges the risks to the central projection to be skewed a little to the downside in the near term, reflecting the possibility of greater persistence of low inflation," the central bank said.
The BoE said that inflation in the U.K. will remain below 1% through 2016. The BoE noted that inflation is expected to rise modestly in the coming months.
The Bank of England (BoE) Governor Mark Carney said at a press conference on Thursday that an interest rate hike is more likely than interest rate cut. He noted that he expects wages to grow solidly this year, and the 2% inflation target will be reached in around two years.
The BoE governor pointed out that the central bank did not discuss negative interest rates.
Carney said that there are downside risks from the slowdown in the global economy.
Indexes on the close:
Name Price Change Change %
FTSE 100 5,898.76 61.62 1.06 %
DAX 9,393.36 -41.46 -0.44 %
CAC 40 4,228.53 1.57 0.04%