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Shares Set for Mixed Start Before Rate Decisions

European shares are set for a mixed start on Thursday, as British stocks are called higher, while German and French markets may stage a small decline ahead of two central bank decisions and a raft of earnings.

Global equities rallied for a second day, helped in large part by gains on Wall Street where stocks rallied after U.S. service sector activity did not contract as much as expected in February.

The European Central Bank and the Bank of England deliver monetary policy decisions later on Thursday. Both are expected to leave rates on hold.

Financial bookmakers in London expect Britain's FTSE 100 to open 8 to 11 points higher, Germany's DAX to open between 3 points higher and 8 points lower, and France's CAC-40 to open flat to down 5 points.

Oil and other commodity prices hovering near new record highs should see index heavyweights such as energy and mining shares rally, helping the FTSE outperform.

Several key defensive large-caps report earnings, including retailers Carrefour and Dutch supermarket group Ahold deliver updates. Belgian supermarket chain Delhaize also reports.

Utilities E.ON and International Power also releases updates, while in the pharmaceutical sector Akzo Nobel reports quarterly results.

The ECB is expected to keep euro zone rates at 4.0 percent but forecast lower growth and higher inflation, while the euro has charged to record highs against the dollar. The ECB's rate verdict is due later in the session.

The BoE is set to keep British rates at 5.25 percent before cutting them by the middle of the year to shore up an economy battered by the global credit crunch.