Looking at individual stocks, shares of Irish building materials firm Kingspan rose almost 10 percent, to the top of the European benchmark, after the building materials firm reported a rise in trading profits for its first half and gave a positive outlook for the rest of the year.
And German chemicals firm Wacker Chemie was among the top performers across the continent after HSBC upgraded the stock to "buy" from "hold," and raised its price target to 150 euros ($174) from 130 euros. Shares closed up 3.37 percent.
New data for Germany showed that all sectors of its economy grew in the second quarter, confirming earlier figures of a robust uptick. In the U.K., mortgage approval numbers fell on the year with consumer credit also slowing.
On Wall Street, stocks began the last trading day of the week higher, following a week of strong corporate results and economic data. The Nasdaq notched a record high, lifted by gains from Netflix and Facebook.
Fed Chair Powell delivered a speech to attendees at the Jackson Hole Symposium in Wyoming, where central bankers are meeting to discuss the future of monetary policy and the changing market structure. The address comes after recent comments from President Donald Trump that he was "not thrilled" with the central bank's raising of interest rates.
Powell said he expected "further gradual" rate hikes if the U.S. economy continues to strengthen.
Back in Europe, minutes from the last European Central Bank meeting showed protectionism and a global trade war are the biggest risks to the euro zone growth.