This is CNBC's live blog covering European markets.

European markets fell Thursday morning, with sentiment sour after U.S. Federal Reserve Chairman Jerome Powell forecast more rate hikes this year, saying that "the process of getting back down to 2% has a long way to go."

The benchmark Stoxx 600 was down 0.9% at 10:30 a.m. London time, with all sectors in the red. Autos fell 1.3%, as banks declined 1.9%. The index has posted declines in all three sessions so far this week.

"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. 

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, though markets are divided on whether it will opt for 25 or 50 basis points.

The Swiss National Bank announced a 25 basis point rate rise, its fifth consecutive hike, Thursday morning. It takes its policy rate to 1.75%.

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."

Asia-Pacific stocks had a mixed Thursday, while U.S. futures were lower following three days of losses.

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