Investors are taking a cautious stance ahead of the European Central Bank's (ECB) monetary policy decision. The ECB is expected to maintain its policy rates, but the possibility of a rate cut starting in June is being considered. The subsequent press conference by President Christine Lagarde is of particular interest, as well as the ongoing testimonies of Jerome Powell before the US Congress. Yesterday, the Chair of the US Federal Reserve indicated that the policy rate is at its peak for the current tightening cycle but clarified that immediate rate cuts are not on the horizon.

Yesterday, UK finance minister Jeremy Hunt presented his Spring budget, in which he announced a further 2 percentage point cut on National Insurance.

In corporate earnings, Rentokil reported a significant increase in revenue and profit for 2023, recommending a higher dividend and expressing confidence in continued momentum for 2024. Melrose Industries saw an increase in revenue and a narrowed pretax loss, with expectations for further growth and margin improvement. Harbour Energy's revenue and profit declined due to lower natural gas prices and production, but the company increased its final dividend. Aerospace supplier Melrose Industries saw a 4.7% drop despite surpassing its annual profit expectations for 2023. Meanwhile, Gambling group Entain also fell by 3.3% after predicting a profit hit due to regulatory measures in the UK and Netherlands.

In other news, Virgin Money UK agreed to a £2.9 billion takeover by Nationwide Building Society, which will create the UK's second-largest provider of mortgages and savings. Virgin Money UK's stock price jumped 36%.

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