European Shares Climb On Rate Cut Hopes; Strong UK GDP Data

(RTTNews) - European stocks advanced on Friday as signs of a weakening U.S. labor market stoked optimism that the Federal Reserve may cut interest rates in September or November.

Bank of England's dovish rate decision on Thursday and better-than-expected U.K. GDP growth data released earlier today also boosted investor sentiment.

The Bank of England held interest rates steady on Thursday but signaled it will cut rates this summer if inflation stays low.

The British pound strengthened against other major currencies after data showed the U.K. economy exited a technical recession in the first quarter, led by a rebound in the services output and household spending.

According to data from the Office for National Statistics, U.K. GDP grew 0.6 percent from the fourth quarter, when the economy shrank 0.3 percent. Output had declined 0.1 percent in the third quarter last year.

Economists had expected the first quarter growth to come in at 0.4 percent. GDP rose 0.2 percent year-on-year in the first quarter, beating expectations for stagnation.

The pan European STOXX 600 jumped 0.9 percent to 521.15 after rising 0.2 percent in the previous session.

The German DAX, France's CAC 40 and the U.K.'s FTSE 100 all were up around 0.8 percent.

Higher metal and oil prices boosted miners and energy stocks. Anglo American, Antofagasta and Glencore all rose about 2 percent while BP Plc gained 1.2 percent and Shell added 1 percent.

CRH, a provider of building materials solutions, soared 4 percent after reaffirming its full-year guidance.

Irish homebuilder Cairn Homes rallied 2.5 percent after saying that the demand backdrop for its well located, energy efficient new homes remains exceptionally high across all tenure types.

German online retailer Zalando gained 2.6 percent as Berenberg upgraded its rating on the stock to "buy" from "hold."