LONDON — European stocks opened higher on Wednesday as investors weighed the latest U.K. inflation data and monitored global market developments.

The pan-European Stoxx 600 was roughly 0.5% higher shortly after the open, and the U.K.’s FTSE 100 and France’s CAC 40 were up 0.3%, while Germany’s DAX rose 0.4%.

German life sciences company Bayer extended losses and was down 7.3% in early trading after its Monsanto Unit had proposed paying $7.25 billion to settle lawsuits claiming that its weed killer Roundup was causing cancer, it said in a press release on Tuesday.

It said it expects its provisions and litigation liabilities to rise from 7.8 billion euros ($9.24 billion) to 11.8 billion euros, with approximately 5 billion euros in litigation-related payments in 2026. Bayer expects a negative free cash flow for this year.

The UK inflation rate fell to 3% in January, according to the latest figures from the Office for National Statistics. Economists polled by Reuters had forecast the consumer price index to fall to 3%, down from 3.4% in the twelve months to December.

“The UK has experienced higher and more prolonged inflation compared to the US or eurozone area, but today’s data shows the tide is changing,” David Smith, portfolio manager at Henderson High Income Trust plc, said.

“Inflation is likely to drop to 2% by the end of the year if not earlier, opening the door to further interest rate cuts by the Bank of England,” Smith added.

The British Pound was flat against the dollar following the as-expected data, at $1.3562. British government bond yields, known as gilts, also held steady.

Sterling dipped and British government bond yields fell during Tuesday’s trading session after data showed the U.K.’s unemployment rate rose to a five-year high, while wage growth slowed.

Earnings on Wednesday come from Glencore, BAE Systems, Orange and Euronext. 

Asian stocks pushed higher overnight in holiday-thinned trade with markets in mainland China, Hong Kong, Singapore, Taiwan and South Korea among those closed for Lunar New Year holidays.

U.S. stock futures were near the flatline in overnight trading after a tepid session on Tuesday. Traders on Wednesday will be watching for the Federal Reserve minutes from the policymakers’ January meeting.

The next big catalyst this week, however, will likely be the personal consumption expenditures price index reading that’s due on Friday. The PCE, the Fed’s preferred inflation gauge, will give further insight into the state of the economy.

— CNBC’s Pia Singh contributed to this market report.

The U.K. inflation rate cooled to 3% in January, according to the latest figures from the Office for National Statistics (ONS).

Economists polled by Reuters had expected the consumer price index to fall to 3%, down from 3.4% in the twelve months to December.

Core inflation, excluding energy, food, alcohol, and tobacco, stood at 3.1% in January, down from 3.2% in December.

The data will be closely analysed by the Bank of England as it looks for further signs to confirm its view that the U.K.’s inflation rate will fall close to the central bank’s 2% target by April.

U.K. jobs and wage data out Tuesday gave the BOE further signs of weakness in the labor market and an easing of inflationary pressures with the unemployment rate rising to 5.2% in December, the highest level in five years. Annual wage growth, a key inflation metric closely watched by the central bank, weakened in the last three months of 2025.

Growth data released last week showed the wider slowdown continued, with the economy growing a meager 0.1% in the fourth quarter. We’ll get another shot of economic activity in the country this coming Friday when purchasing managers’ index (PMI) data is released.

Economists expect that the latest batch of data could prompt the BOE to cut its benchmark interest rate, currently at 3.75%, at its next meeting in March.

“The gloomy picture painted by recent U.K. growth figures and today’s evidence of a lacklustre jobs market has increased the likelihood that the Bank of England will cut rates at the next meeting in March. It has also increased expectation that rates could reach as low as 3% by the end of the year,” Danni Hewson, head of financial analysis at AJ Bell, said in emailed comments Tuesday.

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