ECB weighs increasing rates to record high
Auto stocks fall after China warns EV probe will hurt ties
STOXX 600 up 0.1

Sept 14 Reuters European shares inched higher on Thursday, with investors cautious ahead of the European Central Bank39;s rate decision where it is likely to raise interest rates for a tenth consecutive time.

Markets are now pricing in a 65 chance of a 25basispoint hike that could take Europe39;s key interest rate to a record peak, up from around a 40 chance on Monday.

Analysts and investors had been leaning towards a pause in the ECB39;s rate hike until Reuters reported on Tuesday that the central bank was set to raise its forecast for inflation next year to more than 3.

The morose economic outlook brings investors to think that even if the ECB hikes today, it will certainly be the last one, and that in less than a year from now, we will be talking about the first rate cut in Europe due to economic weakness, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The panEuropean STOXX 600 inched 0.1 higher by 0805 GMT, supported by healthcare and commoditylinked stocks.

The energy index gained 1, tracking a recovery in crude prices, while miners added 1.7 on firmer metal markets.

Neste climbed 3.1 as Goldman Sachs raised the Finnish oil refiner and biofuels producer39;s stock rating to buy.

A European Commission investigation into Chinese electric vehicles believed to have benefited from state subsidies will have a negative impact on…