European stocks climb on eve of rate decisions

European stock markets rose on Wednesday as investors in London focused on Britain's retail and manufacturing sectors on the eve of interest rate decisions from the Bank of England and ECB. In late morning trade, London's benchmark FTSE 100 index climbed 0.54 percent to 6,039.66 points, Frankfurt's DAX 30 gained 0.64 percent to 7,221.43 points and in Paris the CAC 40 edged up 0.05 percent to 4,043.98. The Stoxx 50 index of leading eurozone companies advanced 0.48 percent to 2,965.07 points. "The FTSE seems to be carrying on regardless even though oil remains firmly above $120 a barrel," said Simon Denham at trading group Capital Spreads. "Recent weeks have been a struggle for retailers in particular and the market is focusing on high street bellwether Marks & Spencer who released the best news the sector has had for a while." M&S shares shot to the top of the FTSE 100, winning almost six percent to 360 pence after the clothing-to-food retailer said group sales rose 2.3 percent in its fourth quarter. It was positive news for Britain's retail sector as data revealed that the country's industrial production slumped in February by the biggest amount for 18 months, denting hopes of a swift recovery for the faltering economy. Industrial output, which includes mining and quarrying, sank 1.2 percent in February from January, the Office for National Statistics "ONS" said in a statement on Wednesday. Investors in London were meanwhile awaiting the Bank of England's latest monetary policy decision due Thursday. Most analysts expect the BoE to keep its key lending rate at a record-low 0.50 percent as weak growth offsets concerns over soaring inflation. Financial markets around the world were meanwhile braced for a European Central Bank interest rate hike Thursday, the first since July 2008, but wondered how it could effect struggling peripheral eurozone economies. Analysts were also speculating on how big an increase the ECB might unveil, and whether it would be the first of a series that could extend into 2012. ECB president Jean-Claude Trichet last month said that the bank's record low rate of 1.0 percent might be raised amid concern that inflation now at 2.6 percent could spiral out of control. In Asia meanwhile, Tokyo stocks slipped on Wednesday despite a weaker yen and progress in stopping radioactive leaks at a stricken nuclear plant, dealers said, as economic uncertainty weighed on sentiment. US stocks closed flat Tuesday as data showed slower growth in the crucial services sector.