Europe close: Stocks fall as Carney says interest rates will rise soon
European stocks declined after Bank of England (BoE) Governor Mark Carney said the central bank is close to an interest rate hike.
During a speech in Wales on Thursday, Carney said the UK economic outlook had improved paving the way for an interest rate increase soon.
"The point at which interest rates also begin to normalise is getting closer,” he said.
"In recent months the judgement about precisely when to raise Bank Rate has become more balanced. While there is always uncertainty about the future, you can expect interest rates to begin to increase.”
European counterpart, Mario Draghi also spoke on Wednesday at an event in Lithuania. The European Central Bank (ECB) President said that the monetary authority takes its “price stability mandate very seriously and will continue to do so”.
Ahead of the event, he told Lithuanian business daily Verslo Zinios that the ECB’s recent stimulus steps will help boost recovery.
However, Draghi said governments need to enact structural reforms amid geopolitical tensions that could hurt sentiment.
He added that the
ECB was ready to enact unconventional measures if necessary.
Data-wise, a report from the Confederation of British Industry (CBI) showed UK high street sales slowed in September against the previous month, triggering fresh fears that the UK's consumer-led economic recovery is losing steam.
Nearly 50% of retailers reported higher sales volumes and 17% said they fell, giving a balance of 31% - below August's 37%, according to CBI’s monthly Distributive Trades Survey.
Acting as a backdrop, and following a fairly typical seasonal pattern, US stocks dropped on lighter than usual trading volumes as many traders would be away from their desks as they celebrate the Rosh Hashanah feast day, or Jewish New Year.
US durable goods, jobless claims
US durable goods orders declined 18.2% in August following a 22.5% increase in July, more than the 18% dip expected by analysts. The drop was led by few aircraft related orders.
Another report showed jobless claims in the week to 20 September came in at 293,000 following 281,000 claims a week earlier. Analysts predicted 296,000 claims.
US data on Friday is forecast to show gross domestic product grew 4.6% in the second quarter, more than the previous estimate of 4.2% released 28 August.
H&M, miners fall
Hennes & Mauritz AB slumped as Europe’s second-biggest clothing retailer reported a decline in third-quarter profit.
A gauge of miners, including BHP Billiton and Rio Tinto Group, as copper prices declined.
Cairn Energy jumped after agreeing to sell a 10% stake at a North Sea development.
Ryanair Holdings edged higher after saying its full year earnings will reach the upper end of its guidance.
Direct Line Insurance Group advanced after agreeing to sell its international division to Mapfre SA.
The euro fell 0.38% to $1.2731.
Brent crude futures dropped 0.20% to $96.76 per barrel, according to the ICE.
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