- IMF to raise US growth outlook
- US consumer spending hits five-month high
- US consumer confidence rises
- Cable calls for interest rate hike
FTSE 100: 0.96%
CAC 40: 0.35%
FTSE MIB: 0.53%
IBEX 35: 0.53%
Stoxx 600: 0.56%
European stocks jumped after US consumer spending rose to a five-month high and the International Monetary Fund (IMF) said it is raising its growth outlook for the world's biggest economy.
Consumer spending rose by 0.5% in November after a 0.4% gain in October, as discounts lured early holiday shoppers, the Commerce Department reported today.
At the same time the Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 82.5 in December from 75.1 a month earlier.
Economists had called for 83 after a preliminary reading of 82.5.
In another boost to markets, IMF Managing Director Christine Lagarde told NBC's Meet the Press yesterday that the group is lifting its outlook for the US economy as a budget deal in Washington and the Federal Reserve's plan to reduce its bond buying paint a brighter future for recovery.
In October, the IMF said the US would expand 2.6% next year. Lagarde didn't reveal new figures.
Aside from a few data releases in the US, it was a quiet day in the lead up to Christmas with many economists and traders taking the week off.
BoE may need to raise interest rates, says Cable
Business Secretary Vince Cable has warned that interest rates my need to rise to constrain a housing boom in London and the south-east.
Speaking on BBC1's Andrew Marr Show yesterday, he said there was a risk that large parts of London could be inhabited only by foreigners and bankers as house prices accelerated unless the Bank of England (BoE) raises interest rates.
However, he noted that increasing the rate could hurt manufacturing as it would affect exchange rates
and impact exports.
The BoE has vowed to keep the main interest rate at 0.5% at least until unemployment reaches 7%.
Banco Comercial Portugues and Banco Espirito Santo climbed for the biggest gains in the Stoxx 600.
Merlin Entertainments declined as the company closed its London themepark Chessington World of Adventures Resort after a fire at an on-site restaurant.
Carmat surged after the company's artificial heart was implanted in a patient for the first time last week.
Orell Fuessli tumbled after saying it will report an operating loss of 20m for 2013, due to special charges at its security-printing unit, which produces Switzerland's banknotes.
Swatch gained after the biggest maker of Swiss watches won an arbitration award of 402m Swiss francs against Tiffany & Co.
Lanxess advanced as the chemical maker's Chief Executive Officer said the firm will reach its full-year forecast for earnings before interest, tax, depreciation and amortisation (EBITDA).
ARM Holdings, which designs chips for Apple's iPhones, bounced higher after Apple struck a deal to sell the smartphone through China Mobile. The Eurozone's blue-chip Euro
STOXX 50 index also advanced.
The euro/dollar rose 0.23% to $1.3705.
Brent crude futures fell $0.134 to $111.620 per barrel, according to ICE data.