European markets declined on Thursday as investors awaited the Bank of England’s monetary policy decision

The pan-European Stoxx 600 index fell 0.52% in early trading, with most major sectors in negative territory. Banks and auto stocks experienced significant declines, falling by 2.21% and 1.65%, respectively, while retail stocks managed to gain 1.17%. Rolls-Royce shares stood out, rising more than 11% to hit an all-time high before slightly retreating. This surge was driven by the company’s announcement of reinstating its dividend and upwardly revising its profit forecast due to strong first-half results. The Bank of England is set to announce its latest monetary policy decision at midday London time. Market expectations are leaning slightly towards a 25 basis point interest rate cut by the U.K. central bank, potentially signaling the start of an easing cycle. However, analysts highlight increased uncertainty due to ongoing concerns about service sector inflation and wage growth, despite overall inflation remaining at 2%. This meeting comes on the heels of the U.S. Federal Reserve's recent decision to