European markets move higher after record ECB rate hike

European markets were higher Friday, as investors reacted to a record rate hike by the European Central Bank and further comments from Federal Reserve Chair Jerome Powell.

The pan-European Stoxx 600 was up 1.7% in afternoon trade, with all sectors trading in positive territory. Mining stocks were 2.8% higher to lead gains, while banks were up 2.5%.

On Thursday, the European Central Bank announced a 75 basis point interest rate rise, taking its benchmark deposit rate to 0.75%. The bank also revised up its inflation expectations — to an average of 8.1% in 2022 — and said it expects to hike rates further as “inflation remains far too high and is likely to stay above target for an extended period.”

Meanwhile, the Fed’s Powell said Thursday that the US central bank will raise rates to tackle inflation “until the job is done.”

“History cautions strongly against prematurely loosening policy,” Powell said at the Cato Institute, a libertarian think tank based in Washington, DC “I can assure you that my colleagues and I are strongly committed to this project and we will keep at it until the job is done.”

Markets in Asia-Pacific were higher as investors digested the slew of central bank news, and US stock futures were also in positive territory.

Meanwhile, world leaders offered tributes to Queen Elizabeth IIafter Britain’s longest-serving monarch died Thursday at age 96.

The Bank of England on Friday said it would postpone its September Monetary Policy Committee meeting by a week as the country enters a period of national mourning.

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