European stocks rose, extending their highest level since June 2008, after the Bank of England raised its growth forecast for Europe's third-biggest economy.

Stocks climbed as BOE Governor Mervyn King said that an economic recovery in the U.K. is now "in sight". In the central bank's quarterly Inflation Report, which is King's last before he retires in July, officials predicted that growth will accelerate to 0.5 percent in the second quarter from 0.3 percent in the first three months of the year.

A report from Eurostat showed the combined economy of the euro area shrank more than economists had forecast. That extended the currency bloc's recession to a record sixth quarter. Gross domestic product fell 0.2 percent in the first quarter, the European Union's statistics office in Luxembourg said. GDP slid 0.6 percent in the final three months of 2012.

National benchmark indexes advanced in 16 of the 18 western-European markets. The U.K.'s FTSE 100 Index added 0.1 percent, while Germany's DAX Index rose 0.3 percent. France's CAC 40 Index gained 0.4 percent.

EasyJet jumped 8.3 percent to 1,224 pence after Europe's second-largest discount carrier said revenue per seat for the second half will probably climb 4 percent. The company also narrowed its first-half pretax loss to 61 million pounds ($93 million) from 112 million pounds a year earlier, as more business travelers booked its flights.

Ryanair Holdings Plc, the biggest low-cost carrier, advanced 3.7 percent to 6.37 euros in Dublin trading.

Commerzbank surged 12 percent to 7.79 euros on the first day of its 2.5 billion-euro capital increase. Germany's second-biggest lender has offered its investors 20 shares for every 21 they hold at 4.50 euros apiece. Bank of America Corp. upgraded the lender to buy, saying that the company has become too cheap.

ITV Plc slid 1.9 percent to 129.2 pence after the commercial broadcaster forecast that revenue from its network of television channels will fall 3 percent in its first half. Chief Executive Officer Adam Crozier said in a statement that the company was cautious about TV advertising in 2013.