European stocks posted a weekly gain, rising to a 23-month high, as German investor confidence climbed to the highest in 2 1/2 years and U.S. lawmakers voted to temporarily suspend the government’s borrowing limit.

In Germany, investor confidence increased to a 2 1/2-year high in January. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations climbed to 31.5 from 6.9 in December.

A measure of euro-area services and manufacturing output contracted at a slower pace this month than economists had estimated. A composite index based on a survey of purchasing managers in both industries rose to 48.2 from 47.2 in December, Markit Economics said. A reading below 50 indicates that activity shrank.

The European Central Bank said financial firms will repay more of its emergency three-year loans than forecast in another sign the region’s debt crisis is abating. Some 278 financial institutions will return 137.2 billion euros ($185 billion) on Jan. 30, the first opportunity for early repayment of the initial three-year loan, compared with the median projection of 84 billion euros in a survey of economists.

National benchmark indexes rose in 16 of the 18 western European markets this week. France’s CAC 40 added 1 percent and Germany’s DAX Index gained 2 percent. The U.K.’s FTSE 100 Index advanced 2.1 percent even as Britain’s economy shrank a more- than-forecast 0.3 percent in the fourth quarter.

Unilever advanced 4.3 percent in London trading to the highest level since at least 1988. The consumer-goods company reported revenue growth that beat estimates for a third straight quarter, led by gains in North and South America and demand for personal-care products.

EasyJet surged 8.4 percent, its biggest increase in nine weeks. The discount airline rose to its highest price since its initial public offering in November 2000 after saying quarterly sales increased 9.2 percent.

Rightmove Plc rallied 7.2 percent, its biggest weekly advance in 17 months, as analysts at Barclays Plc and UBS AG recommended the shares. The owner of the U.K.’s largest residential property website said the number of sellers coming to market this month is 22 percent higher than a year ago.

Monte Paschi, the world’s oldest bank, sank 12 percent for the biggest drop since July. Italy’s central bank said Jan. 23 that the lender hid documents from regulators on deals that may prompt the bank to restate profit.

Nokia Oyj slid 7 percent after the phone maker reported a seventh straight drop in quarterly revenue and said it will omit a dividend for the first time in at least 143 years.