This is CNBC's live blog covering European markets.

European markets closed lower Thursday as the Bank of England opted for a more hawkish 50 basis point rate hike.

The benchmark Stoxx 600 provisionally closed 0.5% lower, trimming earlier losses of more than 1%. Banks dropped 2% while autos decreased 1.4%. The index has posted declines in all four sessions so far this week.

The Monetary Policy Committee voted 7-2 to raise the Bank Rate to 5% to tackle the U.K.'s stubbornly high inflation. Analysts were divided on whether the BOE would hike by 25 or 50 basis points, although the majority favored the former.

The FTSE 100 index was little-changed by the news, lower by 0.9%. Sterling was initially flat against the U.S. dollar and euro before declining against both currencies. Two-year U.K. bond yields nudged 2 basis points higher as the 10-year yield fell 2 basis points.

It came after the Swiss National Bank announced a 25 basis point rate rise, its fifth consecutive hike, Thursday morning. Thomas Jordan, chairman of the governing board of the Swiss National Bank, told CNBC that monetary policy was still not sufficiently tight to ensure price stability in the coming years.

In the U.S., Federal Reserve Chairman Jerome Powell on Wednesday forecast more rate hikes this year, saying that "the process of getting back down to 2% has a long way to go."

"Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year," Powell said in remarks prepared for testimony before the House Financial Services Committee Wednesday. 

Mobeen Tahir, director of macroeconomic research and tactical solutions at WisdomTree, said caution was driving investors into thematic equity investing as they position for uncertainty.

"They are looking to add risk, but they are doing it very selectively," he told CNBC's "Squawk Box Europe."

"They are being cautious. They haven't forgotten about the need to hedge risks and to continue seeking strong core exposures…that can withstand in all sorts of market conditions. But tactically and strategically they are looking to add risk with themes that are hot right now, and AI is one."

U.S. stocks, like Asia-Pacific stocks, were mixed on Thursday.

HelloFresh shares boosted 15% on Ocado takeover rumors

Shares of HelloFresh were up 15% in afternoon trading as the recipe box delivery service got a boost from British online grocer Ocado's shares spiking more than 40%.

Ocado shares were up following speculation that several American companies, including Amazon, were considering a takeover deal, as reported by The Times newspaper.

— Hannah Ward-Glenton

Markets and economists react to hawkish BOE hike

Markets were mixed as they digested the Bank of England's 50-basis-point rate rise.

Short-dated U.K. government bond yields were choppy, initially falling, then moving higher, and trading roughly flat one hour after the announcement. Yields on 10-year gilts were 5 basis points lower. Yields move inversely to prices.

The initial movements took the U.K.'s yield curve inversion — when short-term yields are higher than long-term yields — to its deepest level on available data since 2010, according to Reuters.

Neil Shearing, group chief economist at Capital Economics, said higher rates now could lead markets to price in rates starting to come down in 2024 or 2025, which would move the 2-year curve.

"The bond market's initial reaction may reflect a belief that the BoE's more aggressive action could help to contain longer-term inflationary pressures," said Erik Norland, senior economist at CME Group.

Sterling was flat against both the dollar and euro.

"The MPC has demonstrated its determination to get a grip on domestically-generated inflation by hiking Bank Rate by 50bp and by choosing to omit any language designed to assure investors that the peak might be near," said Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, in a note.

"We still retain faith in the wide range of leading indicators which suggest that labour market slack will emerge and consumer price and wage rises will slow over the coming months. As a result, we still disagree with markets' decision to price-in a 6.00% peak for Bank Rate," he said, adding that he expects another 50 basis points worth of hikes spread across August and September.

— Jenni Reid

Bailey: Need to raise rates now or could be worse later

In a statement, Bank of England Governor Andrew Bailey said a 50-basis-point rise in interest rates was necessary.

"We've raised rates to 5% following recent data which showed that further action was needed to get inflation back down. The economy is doing better than expected, but inflation is still too high and we've got to deal with it," Bailey said in a statement.

"We know this is hard — many people with mortgages or loans will be understandably worried about what this means for them. But if we don't raise rates now, it could be worse later. We are committed to returning inflation to the 2% target and will make the decisions necessary to achieve that."

— Jenni Reid

Swiss National Bank chair: Monetary policy is not tight enough to ensure price stability

Thomas Jordan, chairman of the governing board of the Swiss National Bank, speaks to CNBC's Joumanna Bercetche about the decision to hike by 25 basis points.

Bank of England facing a huge credibility test

CNBC's Joumanna Bercetche reports from the Bank of England ahead of its interest rate decision.

Ocado pops 20% following takeover speculation

Shares of British grocery delivery firm Ocado Group popped 20% in morning trade after a report in The Times newspaper said its strong performance came amid "speculation of bid interest from more than one American suitor."

The firm has suffered a steep decline in value since early 2021, as its coronavirus pandemic rally reversed.

A spokesperson declined to comment when contacted by CNBC.

— Jenni Reid

Swiss National Bank hikes rates

The Swiss National Bank hiked interest rates by 25 basis points Thursday, taking the key rate to 1.75%. The move was forecast in a Reuters poll of economists.

Switzerland has not suffered the same level of inflation as many of its European neighbors, but it remains above the central bank's 0-2% target, coming in at an annual 2.2% in May.

— Jenni Reid

Europe stocks open sharply lower

European stocks fell in early Thursday trade, with the Stoxx 600 index down 1.27% at 8:38 a.m. London time.

All sectors declined, with autos shedding 2.1% and banks falling 2.6%.

France's CAC 40 and Germany's DAX were down 1.2% and 1.08%, respectively. The U.K.'s FTSE 100 fell 1.2% ahead of a key monetary policy decision in which markets are raising bets on a potential 50 basis point hike.

— Jenni Reid

Bank of England faces rate decision under pressure

Traders are keenly awaiting the Bank of England's latest monetary policy announcement, due at midday BST, in which at least a 25 basis point hike is all but guaranteed.

Figures for May published Wednesday showed the stickiness of inflation in the economy, with headline CPI holding steady on the previous month at 8.7% and core inflation accelerating to 7.1% from 6.8%.

U.K. government bonds sold off following the announcement, and the pound weakened.

Stephen Gallo, global FX strategist at BMO Capital Markets, said in a note that a 25 basis point hike Thursday would probably result in a weaker pound "as markets remove interest rate hikes from the curve" — resulting in faster credit growth due to higher borrowing and a widening trade deficit due to increased import costs.

"The second option is to move faster and more aggressively with tightening, by shifting to a series of 50 or even 75bps increments. With core inflation above 7.0% and the policy rate less than 5.0%, the Bank is arguably not restrictive enough," he said.

Gallo also described the U.K. as already in a "slow moving fiscal crisis" after data Wednesday showed public sector net debt in May exceeded 100% of GDP for the first time since 1961.

— Jenni Reid

CNBC Pro: Markets are running 'too fast, too quickly' — buy these cheaper stocks instead, analyst says

U.S. stocks have been red-hot, with the S&P 500 hitting its highest level in over a year.

But Steven Glass, managing director and analyst at Pella Funds Management, says U.S. markets have "run too fast, too quickly."

Investors can look at cheaper stocks instead, according to Glass. Of the four stocks he named, two are "very cheap," he said.

CNBC Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: This Wall Street bank's stock is expected to double over the next year, Jefferies

Shares of a Wall Street bank are forecast to more than double over the next 12 months, according to Jefferies.

Jefferies' analysts suggest that large-scale share buybacks of about $4.7 billion over the next three years could help push up the global lender's stock price.

They expect the bank to generate around $24 billion of profit over the course of 2023 to 2025.

CNBC Pro subscribers can read more here.

— Ganesh Rao

European markets: Here are the opening calls

European markets are heading for a lower open Thursday.

The U.K.'s FTSE 100 index is expected to open 45 points lower at 7,512, Germany's DAX 80 points lower at 15,845, France's CAC 37 points lower at 7,512 and Italy's FTSE MIB 132 points lower at 27,600, according to data from IG.

Investors in the U.K. are focused on the Bank of England's next monetary policy announcement. The central bank is expected to increase rates as inflation remains stubbornly high.

Other data releases of note today include preliminary consumer confidence numbers for the EU in June.

— Holly Ellyatt