European Central Bank policymakers on Thursday lowered their annual growth forecast, as they confirmed a widely expected hold of interest rates.

Staff projections now see economic growth of 0.6% in 2024, from a prior forecast of 0.8%. Their inflation forecast for the year was brought to 2.3% from 2.7%.

As the ECB has held rates at a record high since its September meeting, market participants have been eagerly awaiting the March projections for an indication on when it may begin cuts.

Its key rate is currently 4%, up from -0.5% in June 2022, following a run of 10 hikes.

Expectations have shifted to the June meeting, even as ECB staff stress they want to assess wage data from the spring before making a decision.

Euro zone inflation eased to 2.6% in February from 2.8% in January, showing continued progress towards the ECB’s 2% target. However, the core figure which strips out energy, food, alcohol and tobacco proved stickier, at 3.1%.

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LONDON — The Bank of England held interest rates steady at 5.25% on Thursday, with the announcement detailing the very divided opinions among board members.

The Monetary Policy Committee voted 6-3 in favor of holding rates, with two dissenters favoring a further 25 basis point hike and one voting for a quarter-point cut. This marked the first meeting since August 2008 that MPC members have voted to move interest rates in opposite directions at the same meeting.

“The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably,” the Bank said in statement.

“It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation. On that basis, the Committee will keep under review for how long Bank Rate should be maintained at its current level.”

Much of the market focus of late has been on when the central bank will start cutting interest rates from their current 15-year high.

U.K. headline inflation unexpectedly nudged upward to an annual 4% in December on the back of a rise in alcohol and tobacco prices, while the closely watched core CPI figure was unchanged at 5.1%.

However, it has remained on a general downward trajectory, while the Bank’s key indicators of the labor market, wage growth and services inflation have all shown signs of easing.

The MPC notably dropped its prior warning that “further tightening” would be necessary if indications emerged of more persistent inflationary pressures, but stopped short of openly signaling that rate cuts were coming into view.

Inflation is projected to fall temporarily to the Bank’s 2% target in the second quarter of this year before rising again in the third and fourth, due to the varying contribution of energy prices to annual comparisons.

Headline inflation is not expected to return to target again until late 2026, the Bank’s newest Monetary Policy Report projected.

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Headline inflation in the euro zone jumped to 2.9% in December, up from 2.4% the previous month, though core inflation continued to ease.

The annual print was a little lower than the 3% forecast in a Reuters poll of economists.

Core inflation — which doesn’t include energy, food, alcohol and tobacco prices — cooled to 3.4% last month from 3.6% in November.

An overall rise was expected due to base effects from the energy market, as price falls moderate. Energy prices were down 6.7% year-on-year in December, versus a 11.5% fall in November.

Friday’s data will add to the debate over the trajectory of the European Central Bank’s policymaking, with markets expecting rate cuts to begin before the summer.

The headline inflation rise “is essentially a technicality,” Michael Field, European market strategist at Morningstar, said in a note.

“Oil prices fell massively from their 2022 highs, but in December the caps that many European governments had placed on energy prices ran out, meaning the prices consumers paid went up, which has impacted inflation,” Field said.

Central bankers were aware this spike could be coming and so it is unlikely to impact their decision-making, Field said, adding that January’s print will be crucial to see if the downward trend resumes.

LONDON — U.K. inflation fell by more than expected in to hit 3.9% in November, in the lowest annual reading since September 2021.

Economists polled by Reuters had expected a modest decline in the headline consumer price index to 4.4%, after the 4.6% annual reading of October surprised to the downside by dropping to a two-year low.

Month-on-month, headline CPI fell by 0.2%, compared to a consensus forecast of a 0.1% increase.

Core CPI — which excludes volatile food, energy, alcohol and tobacco prices — came in at an annual 5.1%, well below a 5.6% forecast.

The surprisingly large falls prompted a spike in bets that the Bank of England will cut interest rates in 2024, which manifested in a sharp fall in British bond yields.

The U.K. 10-year gilt yield sunk to an eight-month low, dropping 11 basis points to around 3.54%. Yields move inversely to prices. Meanwhile, the U.K.’s FTSE 100 was the only major European stock index in positive territory on Wednesday, climbing 0.8% by mid-morning trade.

The Office for National Statistics said the largest downward contributions came from transport, recreation and culture, and food and non-alcoholic beverages.

The Bank of England last week maintained a hawkish tone as it kept its main interest rate unchanged at 5.25%. The Monetary Policy Committee reiterated that policy is “likely to need to be restrictive for an extended period of time.”

The central bank ended a run of 14 straight interest rate hikes in September, as policymakers looked to wrestle inflation back down towards the Bank’s 2% target from a 41-year high of 11.1% in October 2022.

U.K. Finance Minister Jeremy Hunt cheered the Wednesday figures and said the country was “starting to remove inflationary pressures from the economy.”

“Alongside the business tax cuts announced in the Autumn Statement this means we are back on the path to healthy, sustainable growth,” he said in a statement.

“But many families are still struggling with high prices so we will continue to prioritise measures that help with cost of living pressures.”

Significant fall ‘undermines’ Bank of England caution

The Bank of England has repeatedly pushed back against market expectations for significant cuts to interest rates in 2024, noting last week that “key indicators of U.K. inflation persistence remain elevated.”

Suren Thiru, economics director at ICAEW, said the “startling” fall in inflation recorded on Wesdnesday will reassure households that there is a “light at the end of the tunnel,” with easing core CPI figures showing that underlying price pressures are relenting.

“The likely squeeze on wages from rising unemployment and a stagnating economy should help to continue to keep them on a downward trajectory,” he said by email.

“These inflation numbers suggest that the Bank of England is too pessimistic in its rhetoric over when interest rates could start falling. A deteriorating economy could push the Bank to start loosening policy by the Autumn, particularly if inflationary pressures continuing easing.”

A ‘glimmer of relief’

Richard Carter, head of fixed interest research at Quilter Cheviot, said the latest inflation print adds to a sense of “cautious optimism” in the U.K. relative to the cost of living crisis and bond market chaos of last year.

Despite the drop in CPI, he noted that the broader economic picture remains “complex, marred by stagnation and subdued growth prospects.”

The U.K. economy contracted by 0.3% month-on-month in October, after flatlining in the third quarter.

“This stagnation, leaving the output no higher than it was in January, paints a picture of an economy struggling to rebound from a series of unprecedented challenges,” Carter said over email, while acknowledging that the pace at which inflation is slowing offers a “glimmer of relief” for households.

“The pressures are manifold – from the cost of living crisis, volatile energy markets, Brexit aftershocks, to enduring productivity issues. These factors have collectively dampened economic prospects and consumer confidence.”

LONDON — U.K. Prime Minister Rishi Sunak on Monday reportedly fired controversial Interior Minister Suella Braverman, as he begins a reshuffle of his top cabinet.

Braverman drew widespread criticism last week after printing an op-ed in The Times newspaper that ignored guidance from Downing Street and accused London police of political bias in policing protests.

The home secretary has long been a contentious figure. She resigned from the same job under Sunak’s predecessor Liz Truss due to a serious breach of the ministerial code.

CNBC has reached out to the U.K. government for comment.

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UBS shares climbed on Tuesday morning after the Swiss banking giant resoundingly beat expectations for underlying profit.

The bank recorded an underlying operating profit before tax of $844 million, well ahead of consensus expectations. UBS shares added 4% in early trade as a result.

Factoring in $2 billion in expenses related to the integration of fallen rival Credit Suisse, UBS posted a bigger-than-expected third-quarter net loss attributable to shareholders of $785 million. Analysts polled by Reuters had anticipated a quarterly net loss of $444 million in a company-compiled poll.

Here are some other highlights:

Total group revenues were $11.7 billion, up 23% from $9.54 billion in the second quarter.CET1 capital ratio, a measure of bank liquidity, was 14.4%, unchanged from the previous quarter.Credit Suisse Wealth Management generated positive net new money inflows for the first time since the first quarter of 2022, contributing to inflows of $22 billion for UBS Global Wealth Management.

“You could see that, sequentially, we improved the underlying performance across Wealth Management, Asset Management and our Personal and Corporate banking in Switzerland. They both grew on a quarter-on-quarter basis,” UBS CEO Sergio Ermotti told CNBC on Tuesday.

“The IB [investment bank] has been facing more challenging market conditions, particularly when you look at our business model and the fact that we have been onboarding resources from Credit Suisse. But it was a very solid quarter, and we made very good progress in our integration plans, and at the same time we saw very strong inflows from clients.”

A ‘good set of results’

Analysts at Citi highlighted on Tuesday that the $844 million underlying profit before tax figure was “notably ahead of prior company guidance (of break-even), treble consensus expectations and 6% ahead of our above-consensus forecast.”

“As we expected the beat is driven by better opex [operating expense], 7% below consensus, with revenues also 1% ahead. This is then slightly offset by heavier provisions,” they noted, adding that the acceleration of Wealth Management net new money inflows in September was also “encouraging.”

UBS is also in the process of fully integrating Credit Suisse’s Swiss banking unit — a key profit center — and is expected to cut a hefty proportion of the legacy bank’s workforce.

UBS reported net new deposits of $33 billion across its Global Wealth Management and Personal and Corporate Banking (P&C) divisions, with $22 billion coming from Credit Suisse clients and positive deposit inflows for P&C in September, the month after UBS announced the decision to integrate the domestic bank.

The bank also announced earlier this year that it is targeting gross cost savings of at least $10 billion by 2026, when it hopes to have completed the integration all of Credit Suisse Group’s businesses.

Russia’s government on Friday said it had withdrawn a ban on diesel exports delivered to sea ports via pipelines, removing a large chunk of restrictions it put in place last month.

The Kremlin said in a statement that it had “lifted restrictions on the export of diesel fuel delivered to seaports by pipeline, provided that the manufacturer supplies at least 50% of the diesel fuel produced to the domestic market,” according to a Google translation.

The announcement comes shortly after Russia imposed an indefinite ban on the export of diesel and gasoline to most countries, sending shockwaves through global markets. The restrictions for gasoline exports currently remain in place.

Moscow initially implemented the measures on Sept. 21 to stabilize fuel prices in the domestic market, with Kremlin spokesperson Dmitry Peskov last month saying that the restrictions would remain in place for as long as necessary to ensure market stability, according to Reuters.

The ban prompted a jump in diesel prices, as Russia is one of the world’s largest suppliers of diesel and a major exporter of crude oil.

As part of the Friday announcement, Russia’s government also said it had imposed what it described as a “protective duty” of 50,000 roubles ($495.6) per ton for resellers of petroleum products. The duty is designed to prevent possible “gray exports” — companies that operate through unauthorized channels.

“Thus, the Government is suppressing attempts by resellers to purchase fuel in advance for subsequent export after the current restrictions are lifted. This also prevents them from exporting class fuel under the guise of other products,” the Kremlin added.

Novartis on Wednesday completed the spinoff of its generics and biosimilars business Sandoz, whose shares began trading at 24 Swiss francs in the early minutes of the company’s debut on the SIX Swiss Exchange.

The Swiss drugmaker initially announced intentions to spin off the business in August, offering stakeholders one Sandoz share for every five Novartis shares via a dividend-in-kind distribution.

Narasimhan told CNBC that the company had accelerated its efforts over the last six years to “focus Novartis as a pure play innovative medicines company.”

Pure play companies refer to entities that target a single product or industry sector.

“Over the last six years, we’ve done over $100 billion of transactions. We exited consumer health to create one of the largest consumer health companies, exited Alcon in the largest public market spin in European capital markets, we exited our Roche stake,” Narasimhan told CNBC’s Julianna Tatelbaum.

“Now we spin [off] Sandoz, and what is left now is really where I think Novartis is best suited to succeed in the long run — a pure play innovative medicines company focused on bringing R&D efforts and the new medicines we create to markets around the world.”

Novartis shares climbed more than 3% in early trade in Zurich to lead the pan-European Stoxx 600 index.

Novartis also reiterated its full-year guidance, with sales expected to grow in a high single-digit percentage and with core operating income set to grow in the low double digits to mid-teens.

In a statement alongside the Wednesday announcement, Narasimhan said this was a “truly historic moment for Novartis and Sandoz” as they begin life as independent companies.

“With several consecutive quarters of sales growth, Sandoz starts out from a position of strength as a global leader in Generics and Biosimilars, and I am confident they are poised to deepen their impact on patients and society,” he added.

Jefferies analysts have valued the Sandoz listing at between $12.3 billion and $16.2 billion, when the company begins trading on Wednesday.

Sandoz CEO Richard Saynor also on Wednesday told CNBC that the spinoff would help his company focus its own strategy, which includes a pipeline of 25 biologics projects, with five more set to launch over the next two years.

“Ultimately, it’s about focus. Sandoz is the world’s largest generics and biosimilars company, and now, by becoming an independent company, we can focus on how we grow that business, how we bring more products to patients, and really continue to build on the momentum that we’ve created over the last couple of years,” Saynor told CNBC on Wednesday.

Saynor said the company’s broad aims are to continue to build on the sales momentum of the last seven quarters, expanding the profit margin over the next few years and driving free cash flows.

Around half of Sandoz revenues come from Europe, which Saynor said gives the company a “huge platform to grow.”

“We’ve invested heavily in our biologics pipeline, so, as we sit here today, we have 25 projects in our pipeline, and we’re in the process of launching about five over the next two years,” Saynor said.

“We’ve guided [that] around $3 billion of sales will come from our new pipeline, which is more than twice what we’ve seen over the previous five years, and we’re expecting half to come from biosimilars and half of the growth in total will now come from North America, so we’ll see the U.S. business starting to accelerate over the next few years.”

The chief of the Wagner Russian mercenary group, Yevgeny Prigozhin, is believed to have been killed in a plane crash, Russian state media reported Wednesday.

The aircraft, a business jet, crashed in the Tver region northwest of Moscow, leading to the deaths of all 10 people onboard, according to Russian authorities.

While Russian officials said that Prigozhin was on the passenger list, it was not immediately clear if he was in the aircraft.

“An investigation of the Embraer plane crash that happened in the Tver Region this evening was initiated. According to the passenger list, first and last name of Yevgeny Prigozhin was included in this list,” Russia’s Federal Agency for Air Transport said in a statement.

The plane was flying from Sheremetyevo International Airport in Moscow to St. Petersburg, the agency said, according to a Google translation.

The Russian Ministry of Emergency Services wrote on its Telegram account: “In the Tver region, near the village of Kuzhenkino, a private Embraer Legacy aircraft crashed while flying from Moscow to St. Petersburg. There were 10 people on board, including 3 crew members.”

“According to preliminary information, all on board were killed. EMERCOM of Russia is conducting search operations,” the post read, according to a Google translation.

U.S. President Joe Biden has been briefed on the situation, a White House spokesperson told NBC.

National Security Council spokesperson Adrienne Watson said that, if confirmed, Prigozhin’s death should come as no surprise.

“We have seen the reports. If confirmed, no one should be surprised,” Watson said. “The disastrous war in Ukraine led to a private army marching on Moscow, and now — it would seem — to this.”

U.S. Secretary of State Antony Blinken also commented on the developing situation.

“The fact that Prigozhin made a direct challenge to Putin’s authority, the fact that he questioned publicly the very premises that Putin has advanced for the aggression against Ukraine – that’s playing out and will continue to play out,” Blinken told MSNBC’s Andrea Mitchell on Wednesday when asked about the incident.

“We’ve seen the ongoing drama, too, of where is Prigozhin, what is the arrangement with Putin?” he added. “If I were Mr. Prigozhin, I would remain very concerned. NATO has an ‘Open Door’ policy; Russia has an open windows policy, and he needs to be very focused on that.”

The “open windows policy” was a tongue-in-cheek reference to the fact that numerous prominent Russian officials and businessmen who fell out of favor with Putin died by what local authorities described as falling out of windows or off of balconies.

Prigozhin effectively disappeared from public life after the failed mutiny. But just on Monday, Aug. 21, the mercenary leader appeared in a video published by Wagner-affiliated channels on Telegram, which suggested the footage was filmed in Africa. It was believed to be Prigozhin’s first video address since the coup attempt.

In the clip, the Wagner leader is holding a rifle and standing against a desert backdrop. The camera briefly pans to other armed men in a pickup truck.

“We are working. The temperature is plus 50 [Celsius]. Everything’s the way we like it. PMC Wagner is conducting reconnaissance, making Russia even greater on every continent – and Africa even freer,” Prigozhin said, according to a NBC News translation.

“Justice and happiness for the African nations,” he said. “We are messing with ISIS, Al-Qaeda and other banditos. We hire real supermen and continue working on tasks that were set to us and we promised to carry out.”

NBC News was not able to verify the video’s authenticity, as well as when or where it was shot.

Wagner has operated in parts of Africa including Mali, the Central African Republic and Libya.