European stock markets are trading higher on Thursday, after the Federal Reserve decided to hike interest rates as expected and investors looked ahead to the Bank of England's monetary policy decision due later in the trading session.

Europe's leading Blue-chip index, EURO STOXX 50 rose 35.94 points or 1.05 percent to trade at 3,445.26. UK's benchmark index FTSE 100 gained 50.30 points or 0.68 percent to trade at 7,418.94.

Meanwhile, Germany's benchmark index DAX gained 137.07 points or 1.14 percent to trade at 12,146.94. French benchmark index CAC 40 gained 41.94 points or 0.84 percent to trade at 5,027.42.

On Wednesday, European stock markets settled higher. Europe's leading Blue-chip index, EURO STOXX 50 rose 9.89 points or 0.29 percent to settle at 3,409.32. UK's benchmark index FTSE 100 went up 10.79 points or 0.15 percent to close at 7,368.64.