This was CNBC's live blog covering European markets.

European stocks closed lower Wednesday, with autos tumbling as a fresh U.S. tariff announcement loomed.

The pan-European Stoxx 600 index closed 0.7% lower, with autos down 2.6%, extending losses after a White House official told CNBC that U.S. President Donald Trump could make an announcement on duties as soon as Wednesday.

However, U.K. stocks bucked the regional trend, with the FTSE 100 and FTSE 250 gaining 0.3% and 0.28% respectively.

U.K. borrowing costs meanwhile fell on Wednesday as markets broadly welcomed a flurry of economic news and fiscal announcements.

The yields on 2-year and 10-year U.K. government bonds were both around 3 basis points lower at 4:45 p.m. in London.

Wednesday kicked off with a U.K. inflation print which showed price rises unexpectedly cooled to 2.8% in February, fueling hopes for a more decisive path of rate cuts from the Bank of England this year and driving sterling lower against the U.S. dollar and the euro.

U.K. Finance Minister Rachel Reeves in the early afternoon delivered her spring budget update, confirming expectations for billions of pounds worth of spending cuts targeting welfare and overseas aid, along with measures to crackdown on tax evasion. The government meanwhile reiterated its commitment to increase defense spending to 2.5% of GDP and reform planning rules to boost growth, while sticking to its "fiscal rules."

Following Reeves' speech, the U.K.'s Debt Management Office announced it planned to issue £299.2 billion ($385.5 billion) in gilts for the 2025-2026 year, slightly higher than during the previous year, but just below the £304 billion estimated in a survey of financial institutions by Reuters. As anticipated, it contained a significant reduction in the proportion of increasingly less-popular longer-dated gilts, easing oversupply concerns.

"The market reaction shows the government managed to beforehand properly calibrate expectations... they're making a point to financial markets that they won't blithely spend and hope investors will finance it," George Lagarias, chief economist at Forvis Mazars, told CNBC.

The size of the bond package is closely-watched since it indicates the level of supply in the market for the coming year. It is still among the biggest issuances on record, but here too Lagarias said the reaction would be favorable, given expectations.

"Gilt yields have been rising over the last weeks, but [the government] paid the price beforehand to avoid being rattled by unexpected volatility. The former you can deal with, the latter can bring down your government," Lagarias said.

Asia-Pacific markets traded higher on Wednesday, tracking Wall Street gains on Tuesday on expectations that U.S. President Donald Trump's tariffs could be softer than expected earlier. 

U.S. markets were lower, weighed on by technology stocks.

Europe stocks close lower

Europe's Stoxx 600 index closed lower on Wednesday, provisionally down 0.7% after snapping a three-session losing streak on Tuesday.

Germany's DAX tumbled 1.17% as France's CAC 40 fell 0.96%. The U.K.'s FTSE 100 rose 0.3% on a news-heavy day.

— Jenni Reid

Autos stocks lead declines with tariff update reportedly pending

European automakers tumbled in late deals after Bloomberg reported that U.S. President Donald Trump was preparing to make an announcement on tariffs.

The Stoxx autos index was 2.34% lower at 4:13 p.m., leading sector losses.

Bloomberg reported that Trump was readying for an update as soon as Wednesday, citing people familiar with the matter, but did not specify any details.

The autos industry, which relies heavily on North American cross-border trade, has been rocked by the threat of tariffs this year. In early March, Trump granted most autos firms a one-month exemption from his 25% duties on certain imports from Canada and Mexico. On Monday, Trump suggested autos tariffs could be announced before his April 2 deadline for sweeping reciprocal tariffs.

— Jenni Reid

Britain's finance minister announces billions of dollars in spending cuts

Britain's Finance Minister Rachel Reeves announced billions of dollars worth of spending cuts in her Spring Statement on Wednesday, to close a budget shortfall amid slowing growth and higher borrowing costs.

"The responsible choice is to reduce our levels of debt and borrowing in the years ahead so we can spend more on the priorities of working people," Reeves said to lawmakers in Parliament.

Reeve outlined that welfare cuts last week are forecasted to save £4.8 billion ($6.1 billion) and would get people back into work. Additionally, she set out measures to clamp down on tax evasion and raise revenues for HM Treasury.

Reeves also delivered economic forecasts from the Office for Budget Responsibility (OBR), which halved the U.K.'s growth prospects from 2% to 1%.

"I am not satisfied with these numbers. That is why we on this side of the house are serious about taking the action needed to grow our economy," she said, responding to the OBR's growth downgrade.

Reeves added that the "world is changing" towards the end of her speech. "A changing world demands a government that is on the side of working people. Acting in their interest. Acting in the national interest. Not retreating from challenges." she said.

— Sawdah Bhaimiya

UK stocks trim gains, sterling lower amid spring fiscal statement, inflation

U.K. stocks pared earlier gains as Finance Minister Rachel Reeves confirmed widely reported plans to enact billions of pounds worth of spending cuts on Wednesday afternoon.

The FTSE 100 traded 0.25% higher, while the more domestically-focused FTSE 250 was up 0.48% at 1:15 p.m. London time.

The British pound was 0.45% lower against the U.S. dollar at $1.2885, hitting its weakest level in two weeks.

Currency moves came after a cooler-than-expected U.K. inflation print on Wednesday morning, which saw traders nudge their bets on a May interest rate cut from the Bank of England slightly higher, to just over 50%. Uncertainty has clouded the BOE outlook in recent months as inflation in wages and services has remained sticky, and the global outlook has become more volatile. Markets are no longer fully pricing in 50 basis points worth of cuts before the end of the year.

"Make no mistake, inflation remains on a one-way journey: up," said Sanjay Raja, chief U.K. economist at Deutsche Bank Research, forecasting headline inflation hitting just under 4% later this year.

"The good news is that today's data should provide the BoE a path to continue with its gradual dial down of restrictive policy. We continue to think a May rate cut is more likely than not," he added.

— Jenni Reid

Banco BPM shares shed 5% after report of some stakeholders endorsing stand-alone case

Banco BPM shares dipped 5.3% by 10:37 a.m. London time, after several investors holding a combined 6.51% in the Italian lender said they endorsed a standalone growth plan for the bank.

The stakeholders noted the capital of Banco BPM has "increased significantly," further noting the lender's "important dividends" and its growth prospects on account of a "diversified" strategy, according to a CNBC-translated statement.

Banco BPM has faced the prospect of a potential combination, following domestic rival UniCredit's unexpected takeover bid launched late last year — which Banco BPM said does not reflect its profitability.

UniCredit has been simultaneously building a stake in German lender Commerzbank without issuing a merger bid to date, leaving it unclear whether Italy's second largest bank will pursue its domestic or cross-border combination.

— Ruxandra Iordache

Watch: Barclays chief U.K. economist on the upcoming ‘Spring Statement’

Commerzbank set up special committee to examine UniCredit stake

Commerzbank's supervisory board established a Special Committee in September last year to "support it in its supervision and advisory tasks" relating to UniCredit's unexpected accrual and later increase of a stake in the German lender.

The committee met five times last year and "conducted a detailed examination of UniCredit's stake" and its impact on the German bank, Commerzbank disclosed in its annual report out on Wednesday.

Since the end of last year, Commerzbank has been making a case to stand alone with investors, amid the looming possibility of a potential takeover bid from UniCredit, which is simultaneously pursuing a tie-up with Italian peer Banco BPM. UniCredit has secured a 28% stakehold in Commerzbank, largely through derivatives, and earlier this month clinched the critical European Central Bank's approval to hold up to 29.9% in the German lender.

— Ruxandra Iordache

Renk Group reports record order intake

Germany's Renk Group was trading 0.6% higher at 8:50 a.m. London time, after the company published its 2024 full-year earnings.

The defense contractor reported a record order intake of 1.4 billion euros ($1.5 billion), citing strong market conditions. Adjusted EBIT jumped 26% from the previous year to 189 million euros, while revenue rose 23.2% year-on-year to reach 1.1 billion euros.

Renk — whose product offering includes military vehicles and equipment — said it expected revenue to hit 1.3 billion euros in 2025, with adjusted EBIT forecast to come in between 210 million euros and 235 million euros this year. Its medium-term forecast remained unchanged, with a 2 billion euro target and projected 15% organic revenue growth for 2028 kept in place.

"This outlook is based on the currently expected operating performance, the high order backlog and does not take into account any further market potential from increased defence spending in the EU," the company said in a release on Wednesday.

Shares of the company have gained 141% since the beginning of the year.

— Chloe Taylor

Thales shares rise after French military contract announcement

Shares of Thales were 0.9% higher by 8:30 a.m. in London, after the French defense giant announced it had been awarded a 10-year operational support and logistics contract with the French Defense Ministry.

The deal will see Thales double its equipment handling capacity in the event of a high-intensity conflict.

"In terms of its scale and format, the contract is the first of its kind for the French armed forces and will ultimately consolidate some 30 separate support contracts for land-based equipment in service with the French Army, Navy and Air & Space Force," Thales said in a news release on Wednesday morning.

The company did not disclose the monetary value of the contract.

— Chloe Taylor

French consumer confidence falls unexpectedly

Consumer confidence in France fell slightly in March from the previous month, figures from the country's statistics agency Insee showed on Wednesday.

French consumers were feeling more pessimistic about their personal financial situations, capacity to save and overall standard of living, Insee said.

Economists polled by Reuters had been expecting French consumer confidence to improve slightly this month.

— Chloe Taylor

UK long-term borrowing costs rise

Yields on U.K. government bonds — known as gilts — with long maturity terms rose on Tuesday, after official data showed Britain's inflation rate cooled to 2.8% last month.

The yield on 20-year gilts was 5 basis points higher at 7:40 a.m., while 30-year gilt yields added 1 basis point. Yields on 5- and 10-year gilts were little changed, while 2-year gilt yields were 1 basis point higher.

— Chloe Taylor

Businesses pile pressure on U.K. Financial Minister ahead of budget update

Home improvement retailer Kingfisher became the latest British company to report a negative impact from U.K. Finance Minister Rachel Reeves' October budget — as she prepares her latest update on the state of the British economy.

In its annual earnings release on Tuesday, Kingfisher, which owns home improvement retailer B&Q, said the government's policies had "raised costs for retailers and impacted consumer sentiment," with sales of big-ticket items falling.

It is the latest in a line of British businesses that have criticized Reeves' bumper tax-rising budget since autumn. The companies will now be keeping a close eye on Reeves' Spring Statement, when she's set to update lawmakers on her latest spending and taxation plans at 12:30 p.m. London time Wednesday.

Read the full story here.

— Matt Ward-Perkins

Sterling dips after UK inflation update

The British pound was 0.2% lower against the dollar at 7:19 a.m. in London, shortly after official data showed U.K. inflation cooled to 2.8% in February.

Sterling was last seen trading at $1.2917.

— Chloe Taylor

U.K. expected to unveil more spending cuts amid troubled times for the economy

Britain's Labour government will come under intense scrutiny on Wednesday, as Finance Minister Rachel Reeves prepares to update lawmakers on her spending and taxation plans and the nation's economic outlook amid unsettling times for the U.K.

Reeves is expected to announce billions of pounds worth of spending cuts as a way to close a budget shortfall caused by a rise in borrowing costs since her first fiscal plan, released last fall.

Read the full story here.

— Holly Ellyatt

U.K. inflation cools to 2.8%

Britain's consumer price index rose by 2.8% in the 12 months to February, figures from the country's Office for National Statistics showed on Wednesday.

In January, the U.K.'s annual inflation print rose to a higher than expected 3%.

European markets: Here are the opening calls

European markets are expected to open in broadly higher territory Wednesday.

The U.K.'s FTSE 100 index is expected to open 4 points higher at 8,673, Germany's DAX up 38 points at 23,142, France's CAC 6 points higher at 8,108 and Italy's FTSE MIB 87 points higher at 38,769, according to data from IG. 

It'll be a busy day for U.K. financial markets, with the latest inflation data expected at 7a.m. London time, and the "Spring Statement" from U.K. Finance Minister Rachel Reeves due just after midday local time.

Other data releases include French consumer confidence figures. There are no major earnings releases Wednesday.

— Holly Ellyatt