European stock markets experienced a surge on Friday, driven by stronger-than-expected UK growth figures and growing optimism that the U.S. Federal Reserve may implement rate cuts. Germany's DAX index rose by 0.4%, France's CAC 40 increased by 0.5%, and the UK's FTSE 100 also climbed by 0.4%. The UK's economy grew by 0.6% in the first quarter of 2024, surpassing expectations and effectively exiting a recession that began in the latter half of the previous year.

The Bank of England maintained interest rates at a 16-year high, but a split vote fueled speculations of a potential rate reduction in the upcoming months. Money market traders estimate a 45% chance of a cut at the next policy meeting, with 58 basis points of easing expected by year-end. Investors are eagerly awaiting the European Central Bank's latest monetary policy meeting account, which may provide insights into future rate cuts, especially after indications of a likely reduction in June.

In the corporate arena, shares of IAG surged 2% after reporting a first-quarter operating profit of €68 million, a significant increase from €9 million in the same period last year. IAG also reported a sharp rise in revenue, positioning itself strongly for the upcoming peak summer travel season. Similarly, Mediobanca's shares climbed 3% following the announcement of a 42% increase in net profit for the January-March quarter, with plans to distribute an interim dividend of €421 million this month.