Traders will be keeping an eye on comments from Bank of England boss Mark Carney as the pound struggles on growing concerns about a possible no-deal Brexit (Kirsty O’Connor)

London (AFP) – European stocks slid Thursday before the Bank of England’s latest interest rate announcement and wider economic forecasts, with investors beset by Brexit concerns and a darkening eurozone outlook.

Dealers are looking ahead to the Bank of England’s updates at 1200GMT, which comes as the British government struggles to push through its Brexit plan and concerns build that the country will leave the EU without a deal on March 29.

The pound wavered on stubborn Brexit fears, as Prime Minister Theresa May headed to Brussels in a bid to alter her deal with the EU — but with most observers saying she has very little chance of success.

The BoE is expected to keep its main interest rate at 0.75 percent but could alter its forecasts for UK economic growth and inflation owing to Brexit uncertainties.

In the eurozone meanwhile, fears are also growing of a slowdown.

– ‘Yet more bad news’ –

The European Commission sharply cut Thursday its 2019 eurozone growth forecast on the unexpected slowdown in Germany and protests in France.

“Yet more bad news reinforces the impression that the eurozone is headed steadily into recession territory,” noted IG analyst Chris Beauchamp.

The commission, the EU’s executive arm, is now expecting growth of 1.3 percent in the eurozone this year, a significant cut from 1.9 percent predicted in November.

It said Europe is facing international headwinds — including Brexit fears, Italian economic woes and the global trade war — which have now taken the steam out of a post-crisis recovery in the eurozone.

“That eurozone growth downgrade (is) not helping matters, but after their recent surge markets seem quite vulnerable to an outbreak of bad news,” Beauchamp told AFP.

“Plus, we are dealing with a winding down of the heavyweight earnings from the US, which probably leaves us at risk of a pullback in the short-term.”

Sentiment had already taken a major knock Wednesday as official figures showed that industrial orders in Germany fell back in December, the latest sign of a slowdown in Europe’s largest economy.

– Asia aims higher –

Elsewhere Thursday, Asian stocks mostly rose as regional investors began to return from their Lunar New Year break, though Tokyo edged lower after a negative lead from Wall Street.

Most trading floors have re-opened but business remains light, with Hong Kong and Shanghai still closed, while focus turns on the resumption next week of China-US trade talks in Beijing.

The two sides will try to hammer out a deal to resolve their long-running tariffs row, with markets broadly hopeful just three weeks before a deadline that will see the US more than double levies on hundreds of billions of dollars worth of Chinese goods.

Donald Trump has said he plans to meet his Chinese counterpart Xi Jinping before the end of the month to put the finishing touches to any deal, which would be in both countries’ interest as the global economy begins to wobble.

Sydney climbed more than one percent and Wellington put on 0.7 percent. Seoul ended flat, while Mumbai was up 0.1 percent after the Reserve Bank of India cut interest rates.

However, Tokyo fell 0.6 percent despite a near 18-percent surge in SoftBank, its biggest rise in a decade, fuelled by news of a $5.5 billion share buyback.

 – Key figures around 1120 GMT –

London – FTSE 100: DOWN 0.3 percent at 7,155.10 points

Frankfurt – DAX 30: DOWN 1.2 percent at 11,188.67

Paris – CAC 40: DOWN 0.6 percent at 5,046.54

EURO STOXX 50: DOWN 0.9 percent at 3,184.40

Tokyo – Nikkei 225: DOWN 0.6 percent at 20,751.28 (close)

Hong Kong – Hang Seng: Closed for a public holiday

Shanghai – Composite: Closed for a public holiday

New York – Dow: DOWN 0.1 percent at 25,390.30 (close)

Euro/dollar: DOWN at $1.1337 from $1.1362

Dollar/yen: DOWN at 109.81 yen from 109.97

Pound/dollar: DOWN at $1.2904 from $1.2932 at 2200 GMT Wednesday

Euro/pound: DOWN at 87.84 pence from 87.86 pence

Oil – Brent Crude: DOWN 29 cents at $62.40 per barrel

Oil – West Texas Intermediate: DOWN 27 cents at $53.74

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