Admiral jumps on Q2 pretax profit beat
British economy grew 0.6
STOXX 600 up 0.2

Aug 15 Reuters European shares rose on Thursday as benign inflation data cemented bets of a U.S. rate cut in September and gains in insurer Admiral added to the upbeat mood.

The panEuropean STOXX 600 had risen 0.2 to trade near a twoweek high and was on track for a third straight session of gains.

The insurance sector rose 0.5, boosted by a 6.7 rise in Admiral after the British motor and home insurer posted a betterthanexpected 32 jump in firsthalf pretax profit.

Mild U.S. inflation readings this week have cemented hopes that the Federal Reserve will lower borrowing costs in September for the first time in 412 years.

Traders are now split on whether policymakers will opt for a supersized 50basispoint reduction or a normal 25 bps cut.

We39;re going to get probably a 25 bps cut because that is how central banks have always worked. However, if they deliver a 50 bps cut it has huge merit and can avert a recession, Manish Singh, chief investment officer at Crossbridge Capital said.

The 39;fear gauge39;, the Euro STOXX volatility index, returned to levels seen before the market39;s riskoff sentiment that began in the first week of August.

It hit a low of 15.82 points, dipping below the lows of August 1 and reflecting a more optimistic and improved investor mood.

However, a veil of caution still hung in the air, with investors awaiting the arrival of further economic data, including…