European stocks rise, U.K. budget in focus

The DAX index in Germany jumped 0.7%, the CAC 40 in France added 0.6% and the FTSE 100 in the U.K. gained 0.4%

European stocks rose Monday, starting the new week on a positive note.

At 08:02 GMT, the DAX index in Germany jumped 0.7%, the CAC 40 in France added 0.6% and the FTSE 100 in the U.K. gained 0.4%.

European stock markets have followed the gains seen in Asia earlier Monday, amid comments from U.S. central bank policymaker John Williams who said at the end of last week that U.S. interest rates can fall “in the near term”.

The central bank’s next meeting will take place on Dec. 9-10 and markets are currently pricing in a 69.3% chance of a quarter-percentage-point cut, according to the CME FedWatch tool.

This has helped stock indices recover from the sharp selloff over the last couple of weeks as investors questioned the sky-high valuations of the heavily-weighted AI-linked tech companies.

Back in Europe, the main focus is on the release of the German Ifo business climate indicator later in the session, which is expected to show a slight improvement in November.

Elsewhere, investors in the U.K. are gearing up for the Autumn Budget on Wednesday, with Finance Minister Rachel Reeves widely expected to have to raise taxation in order to balance the country’s budget.

Britain’s economy has been largely stuck in a rut of slow growth since the 2007-08 financial crisis, something Reeves and Prime Minister Keir Starmer vowed to end when the Labour Party returned to power after 14 years last year.

However, Reeves looks set to raise taxes by tens of billions of pounds for the second time since the election to stay on track to meet her borrowing targets, hoping to avoid a bond market selloff while also increasing welfare spending.