Europe stocks rise as Bank of England cuts rates; Volvo Cars down 9%

Volvo Cars CEO Jim Rowan says the automaker could consider both production and supplier relocation if needed in the face of tariffs from U.S. President Donald Trump.

Societe Generale shares popped in early trade after the French lender posted sharp year-on-year hikes in fourth-quarter and full-year profit and announced an 872-million-euro ($903 million) share buyback scheme.

The bank’s stock was up 8.71% at 8:42 a.m. London time.

Societe Generale on Thursday reported that group net income more than doubled to 1.04 billion euros in the fourth quarter. Across 2024 as a whole, net income was up 69% at 4.2 billion euros, with the bank citing “materially” improved performance and discipline on expenditures.

“Strong capital build-up, strong and sustainable business growth, strong cost control and risk management, and a material progress in our integration projects led to the doubling of the earnings per share,” group CEO Slawomir Krupa said in a statement accompanying the results.

The bank also proposed a cash dividend of 1.09 euros per share and increased its payout ratio to 50% of its net income.

This year, it targets year-on-year revenue growth of over 3% and an increase in its Return on Tangible Equity — a measure of profitability — to more than 8%.

— Ruxandra Iordache

European stock markets were broadly higher in early deals Thursday, with the Stoxx 600 index climbing 0.68% as sentiment continues to rebuild following the tariff-sparked sell-off on Monday.

The U.K.’s FTSE 100 was up 1% at 8:45 a.m. in London, while the British pound dropped 0.45% against the U.S. dollar, as traders gear up for an interest rate announcement and forecasts from the Bank of England.

The central bank is widely expected to cut rates by a quarter-point, so attention will be on policymakers’ communications on inflationary pressures and the U.K. growth outlook.

Yields on U.K. government bonds, which have cooled significantly following a spike last month, were slightly higher. The 2-year gilt yield was up two basis points at 4.162%.

— Jenni Reid

Sweden’s Volvo Cars on Thursday reported a 12% rise in full-year operating income and record revenue, but warned of severe market challenges ahead from intensifying electric vehicle competition and global tariffs.

Shares slid 6% at the European market open Thursday.

Profit slid 28% in the final three months of the year, which the company said was affected by a one-off 1.7 billion kronor impairment related to its joint venture with Swedish battery developer Northvolt, Novo Energy. Year-on-year sales for the fourth quarter nudged 1% higher, but shed 6% in China and 2% in the U.S.

The company reiterated 2026 guidance to deliver a core earnings before interest and taxes (EBIT) margin of 7-8%, but said 2025 would be a “challenging and transition year” toward Volvo Cars’ long-term growth ambitions, as it expected slower market growth and “increased discounts” across the industry.

This will make it difficult to match the company’s 2024 volumes and profitability, it added.

“In [20]25 I think we’re going to see that turbulence increase. And the way I frame it is, I think we’re going to see turbulence in terms of trade tariffs, maybe some geopolitics, and we’re going to see some policy changes. I also think we’re going to see the transition to EV slow down a little bit, which is okay for Volvo Cars, because we have mild hybrid technology as well as plug in hybrid technology,” CEO Jim Rowan told CNBC.

— Jenni Reid

Danish brewer Carlsberg on Thursday reported a slight miss in fourth-year sales and pointed to lower growth in 2025.

The company posted fourth-quarter sales to 15.72 Danish kroner ($2.18 billion), coming in just below the 15.79 billion Danish kroner estimated by analysts in an LSEG poll.

Full-year sales totaled 75.01 billion Danish kroner, up 1.9% year-on-year on a reported basis and virtually in line with the 74.91 billion Danish kroner anticipated.

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— Karen Gilchrist

Stocks in China and the renminbi face “a tough year regardless of how trade tensions play out,” according to Thomas Mathews, head of Asia Pacific markets at Capital Economics.

Higher tariffs, or elevated tariffs that remain where they are, leave plenty of room for “China’s markets to deteriorate,” according to the firm, a London-based researcher. “But tariffs are, in our view, only one reason to be downbeat,” Mathews wrote Wednesday.

China’s tepid economy ought to keep down bond yields, and the central bank is more likely “to let the currency weaken.”

Meanwhile, stock market investors may be too optimistic about the effect of government measures to boost the economy and too confident about the ability of companies in China to “generate sustained growth in earnings per share,” Mathews said, arguing that “despite a recent pick-up, EPS are still lower than they were ten years ago. And the economic backdrop of that decade was much rosier than we think the next one will be.”

— Scott Schnipper

European markets are expected to open higher Thursday.

The U.K.’s FTSE 100 index is expected to open 53 points higher at 8,672, Germany’s DAX up 92 points at 21,640, France’s CAC up 26 points at 7,905 and Italy’s FTSE MIB 70 points higher at 36,772, according to data from IG.

Earnings are set to come from ING, ArcelorMittal, Carlsberg, AstraZeneca, Ørsted, Vinci, L’Oreal, Siemens Healthineers, Telenor, Societe Generale and Maersk.

The bank of England is set to deliver its latest monetary policy decision Thursday, with the central bank widely expected to implement its first interest rate cut of the year.

— Holly Ellyatt