Shares were supported after the U.S.' closely-watched non-farm payrolls employment report came in stronger than expected. U.S. employers added 288,000 jobs in June and the unemployment rate fell to 6.1 percent from 6.3 percent.
"The evident strength of the U.S. labor market in June is one of the key reasons why we think the Federal Reserve will be persuaded to begin raising interest rates earlier than most expect," said Paul Ashworth, chief U.S. economist at Capital Economics, in a research note after the report was out.
The news pushed U.S. stocks higher on Thursday, lifting the Dow industrials above 17,000 for the first time ever.
Read MoreBoom! Job growth accelerates, rate falls to 6.1%
Back in Europe, the ECB kept its monetary policy unchanged. However, in a regular press conference following the decision, ECB President Mario Draghi surprised market watchers by revealing that policy meetings were set to become six-weekly, rather than monthly, and the central bank would publish a record of its meetings going forward. He also gave further details of the ECB's new long-term lending program for banks.
Read MoreECB holds fire, all eyes turn to Draghi
It came after Markit released its final composite Purchasing Managers' Index for the euro zone. The figure came in at a six-month low of 52.8, in line with a flash estimate. Separate data revealed that euro zone retail sales for May came in flat month-on-month, below forecasts for a 0.2 percent rise. The year-on-year the figure read 0.7 percent.
Read MoreEuro zone retail sales stall as households feel pain
Balfour Beatty slides
In stocks news, Balfour Beatty was among the biggest losers on Thursday after the British company issued a profit warning. It said trading at its mechanical and engineering division had worsened, resulting in a £35 million ($60 million) profit shortfall. Shares ended the day around 4.6 percent lower.
Volkswagen shares were also lower on rumors the group was preparing a takeover bid for U.S. truck maker Paccar next year. Volkswagen denied the rumors to CNBC. Shares closed down around 0.3 percent.
Big risers on Thursday included Ocado, which ended the day around 8.7 percent higher.
Poundland, meanwhile, reported an 18 percent rise in first-quarter sales to £262.6 million ($450.3 million), with pre-tax profits up 25.1 percent. The stock closed up around 3.4 percent.
The European Commission has approved Vodafone's acquisition of Spain's Ono. Vodafone shares were up over 1 percent.
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