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* BoE cuts Q2 economic growth forecast
* U.S. central bank holds rates steady
* Italy leads gains among major indexes
* Deutsche Bank falls on report of U.S. probe (Updates to close)
June 20 (Reuters) - European stocks surged to six-week highs on Thursday, as dovish signals from the Bank of England and Federal Reserve, allied to optimism around the resumption U.S.-China trade talks, saw investors piling into riskier assets.
The pan-European STOXX 600 index finished 0.4% higher, with most country indices in the black as investors globally priced in the prospect of an easing of U.S. interest rates next month and more to follow.
The Bank of England, in contrast to the Fed, continues to threaten to raise and not lower rates, but its June meeting saw the Monetary Policy Committee slash second quarter growth forecasts to zero, heading off any market fears that it would actually deliver a hike anytime soon.
"The Bank of England was never going to rock the boat with an interest rate rise, given static economic conditions and a continued lack of direction on Brexit," Laith Khalaf, a senior analyst at Hargreaves Lansdown wrote in a note.
"(But) with the Fed now striking a more dovish pose as it also sees rising downside risks in the global economy, we shouldn't entirely rule out the possibility the next interest rate move may be downwards."
London's FTSE 100 saw a sharp rise after the BoE statement, and hit session highs increasing as much as 0.7%, before closing up 0.3%.
Italy's FTSE MIB index was the outstanding performer of the big European markets, rallying 0.7%, with analysts pointing to signs the European Commission could hold off on moves to discipline the country over rising debt.
Expectations of policy easing have helped drive a near 5% gain for the STOXX 600 this month, helping the main index recoup almost all of a steep sell-off that made May the worst month in more than two years.
Tumbling euro zone bond yields pointed to more respite for European public and private sector borrowers, while pressuring interest-rate-sensitive banking stocks, which lost 1.3% as the worst-performing European sector.
Signs the United States and China will return to the negotiating table over trade also bolstered sentiment, with tariff-sensitive auto and technology stocks gaining 0.8% and 1.6% respectively.
Germany's DAX hit its highest level in almost nine months, helped by software company SAP advancing 1.5% after arch-rival Oracle forecast current-quarter profit above estimates.
German food delivery company Delivery Hero jumped 9.7%, the most on the benchmark index, after raising its full year revenue outlook by 200 million euros.
One high-profile decliner was Deutsche Bank AG, which slipped 2.6% after a report U.S. federal authorities are investigating whether the German lender complied with laws meant to stop money laundering and other crimes.
Swiss shares hit new all-time highs in the session as watchmakers got a boost from better than expected Swiss watch exports data for May.
Swatch shares topped the index, up 2.2%, while Richemont rose 0.2%.
(Reporting by Amy Caren Daniel, Medha Singh and Susan Mathew in Bengaluru; Editing by Catherine Evans and Ed Osmond)