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The ECB was expected to announce a cut to its main interest rate at 1145 GMT, shortly before policy announcements from the BoE tipped to include a plan for more stimulus aimed at aiding Britain’s recession-hit economy.

In late morning deals, London’s benchmark FTSE 100 advanced 0,28 percent to 5 700,78 points, Frankfurt’s DAX 30 index rose 0,56 percent to 6 601,00 points and in Paris the CAC 40 edged up 0,10 percent to 3 271,55.
In foreign exchange trade, the European single currency slid to US$1,2512 from US$1,2527 late yesterday in New York.

“Eyes will be on Europe once again but this time it will be to see what monetary policy modifications the ECB and Bank of England will take to counter a region in decline,” said Andrew Taylor, market strategist at GFT trading group.
“As it stands, markets have factored in a 25 basis points cut (to the ECB rate) which means that delivering just this will have a diluted effect . . . A 50 basis points cut will send a clear signal that they are working together with European leaders on a common goal to stop the rot and tackle growth.”

The ECB’s main lending rate stands at a record-low 1,0 percent and as does the BoE’s at 0,50 percent.
Markets expect the BoE to announce plans to pump out an additional £50 billion (US$78 billion) of stimulus over the coming months.
In company news yesterday, shares in British vehicle engineering group GKN soared 12,97 percent to 210,8 pence after the company said it had agreed to buy Volvo’s aerospace engine division for £633 million.

“The combination of GKN Aerospace and Volvo Aero creates a world leader in both aero structures and aero engine components,” GKN said in a statement.
Barclays’ shares meanwhile fell 0,33 percent to 165,45 pence as Moody’s cut its outlook on the British bank’s financial strength rating to “negative” from “stable” after top executives resigned                    over an interest rate rigging scandal.

France Telecom edged up 0,67 percent to 10,48 euros, as more of the group’s former executives were to go before an investigating magistrate yesterday, a day after the ex-head of the company was placed under investigation over a spate of employee suicides.
Europe’s biggest vehicle maker Volkswagen jumped 6,05 percent to 135,75 euros as it prepared to wrap up its takeover of German luxury sports car group Porsche two years earlier than planned in order to unlock hitherto untapped economies of scale.

Asian stock markets closed mixed in subdued trading, as investors took to the sidelines following recent gains and waited for a ECB and BoE meetings.
It is hoped that an ECB rate cut will build on the progress made by European leaders last week, whose surprise agreement to help the embattled single currency has lifted markets in recent days. — AFP.