European stocks fell ahead of the central bank meeting

European stocks opened lower on Thursday amid expectations the European Central Bank will raise borrowing costs later in the day, following the Federal Reserve’s indication that it will approve further increases.

The rise of H&M shares limited the losses somewhat, and lifted the shares of the retail sector after announcing a good start to sales in June, the first month of the company’s third quarter.

The pan-European Stoxx 600 index was down 0.3 percent by 0708 GMT. European retail stocks rose 0.9 percent, with Sweden’s H&M rising 5.3 percent.

The European Central Bank is expected to raise the deposit rate by 25 basis points to 3.5 percent later in the day, the highest level in 22 years, and leave the door open for further hikes, widening its fight against high inflation even as the euro zone economy slows. .

The Federal Reserve left interest rates unchanged on Wednesday, but indicated that borrowing costs will likely rise by half a percentage point by the end of the year.