Stoxx 600, FTSE, DAX, CAC

LONDON — European stocks finished broadly higher on Wednesday as investors gear up for central bank decisions.

The pan-European Stoxx 600 closed the session just above the flatline, with sectors mixed and most major bourses in positive territory.

London’s FTSE 100 led regional gains with a jump of 0.9%. It came after inflation data published Wednesday showed that the U.K. inflation rate cooled to 3.2% in November, down from 3.6% a month earlier.

The index was lifted higher by financial services and homebuilder stocks, which reacted positively to the November inflation figures and the prospect of an interest rate cut from the Bank of England this week.

The BOE’s nine-member monetary policy committee is expected to trim interest rates by 25 basis points to 3.75%, given a backdrop of lackluster growth and signs that unemployment could be ticking higher.

Homebuilder Barratt Redrow gained 3.7%, topping the FTSE 100, while retirement savings firm Phoenix Group finished the session 3.3% higher.

The British pound fell in the aftermath of the inflation print, and was last seen trading around 0.2% lower against the U.S. dollar.

Against the euro, the pound lost around 0.3%.

Yields on British government bonds, known as gilts, fell across the curve following the inflation print. The yield on the benchmark 10-year gilt was last seen 4 basis points lower, while long-term 30-year gilts also saw their yields move 4 basis points lower.

Bond prices and yields — which reflect how much interest the government pays on its debt — move in opposite directions. The U.K. currently has the highest long-term borrowing costs of any G7 nation, with its 20- and 30-year gilts trading with yields above the critical 5% threshold.

Central bank action across Europe will remain in focus this week, with the European Central Bank also set to hold its final policy meeting of the year on Thursday.

While the central bank is expected to keep rates at 2%, ECB President Christine Lagarde said it was likely to lift its euro zone growth forecasts again. In September, it raised its annual GDP growth forecast to 1.2%.

Riksbank, and Norges Bank will also hold their last monetary policy decisions for 2025 this week.

Elsewhere, drinks giant Diageo announced Wednesday it was selling its 65% stake in East African Breweries to Japan’s Asahi Holdings for around $2.3 billion. Its shares ended the day 0.2% lower.

U.S. stocks were in negative territory just ahead of midday trading on Wednesday, with the S&P 500 on course for its fourth negative session in a row.

Asia-Pacific markets traded mixed on Wednesday as investors parsed Japan’s trade data.

— CNBC’s Liz Napolitano contributed to this market report.