European stocks held steady in early trading on Wednesday, while sterling recovered after hitting a 13-day low overnight as the Bank of England reiterated that it would end its emergency bond-buying at the end of the week.
The MSCI world equity index, which tracks shares in 47 countries, was flat on the day at 0846 GMT, holding near the previous session’s two-year low.“We’ve had a really fast decline in equity markets over the last few days, obviously to do with the heightened recession fears,” said Axel Rudolph, a market analyst at IG Group.
But the BoE has also signalled privately to lenders that it was prepared to extend the support beyond Friday’s deadline if necessary, the Financial Times reported.Britain’s economy unexpectedly shrank in August, GDP data showed. Former U.S. Treasury Secretary Larry Summers criticised the British government’s policy and communications, speaking at an investment conference in Sydney.