Fed Chair Jerome Powell said that making the outsized cut now while the US economy is still in decent shape would help to limit the chances of a full-blown downturn. But he was careful to avoid committing to a similar pace of cuts going forward, saying that any further moves will be determined by how the economy fares.

The FTSE 100 ( ^FTSE) and European stocks were higher on Thursday after the US Federal Reserve delivered its half-point cut to US interest rates last night. It was the central bank's first interest rate cut in more than four years.

The moves come ahead of fresh Bank of England inflation data, which will give a read of the health of the economy as we head into autumn.