• The U.S. Federal Reserve said Wednesday it will begin to curb the pace of its monthly bond-buying program "later this month."
• The Bank of England's Monetary Policy Committee decided on Thursday to hold off pulling the trigger on interest rate hikes.

LONDON — European stocks closed higher on Thursday as markets reacted to the U.S. Federal Reserve's announcement that it will start to taper its bond-buying program and the Bank of England's decision to hold rates steady for now.

The pan-European Stoxx 600 added 0.4% by the close, with tech climbing 1.4% to lead gains while banks dropped 2% following the Bank of England's latest policy announcement.

Market focus was on the Bank of England's decision to hold interest rates steady, defying some investors' expectations that it would become the first major central bank to hike rates following the pandemic. The pound was down more than 1% against the dollar after the announcement.

Read more: Bank of England holds off hiking rates despite surging inflation

Markets began the day digesting the latest move and comments from the U.S. Federal Reserve. The central bank said Wednesday it will begin to curb the pace of its monthly bond-buying program "later this month." The buying will slow by $15 billion per month, which means the quantitative easing should end by the middle of 2022, although the Fed reiterated flexibility, saying the amount could change if warranted.

The Federal Open Market Committee said the move came "in light of the substantial further progress the economy has made toward the Committee's goals since last December."

Read more: Fed to start tapering bond purchases later this month as it begins pulling back on pandemic aid

It was a busy morning for earnings in Europe on Thursday, with Credit Suisse, BMW, Commerzbank, Deutsche Post, Tate & Lyle, BT, Monte dei Paschi di Siena, Enel and SocGen among those reporting.

Credit Suisse beat analyst estimates for the third quarter, but took a hit from charges settling allegations of corruption in Mozambique and other legal issues.

The Swiss bank also revealed that it expects to report a net loss in the final quarter of 2021 and said it plans to scale back its investment banking operations.

French bank Societe Generale posted on Thursday better-than-expected third-quarter earnings on higher revenue in its corporate and investment banking business. Shares of the bank closed up 1% Thursday.

Alstria Office REIT was the biggest climber on the Stoxx 600, soaring more than 17% after the German real estate investment trust announced a 3.5 billion euro ($4.1 billion) takeover bid from Brookfield Asset Management.

BT shares climbed more than 11% after a strong earnings report.

At the bottom of the European blue chip index, German chemicals company Lanxess fell more than 7% after warning that increased costs would mean its 2021 core profit will come in at the lower end of its guidance range.

Virgin Money U.K. dropped more than 9% after flagging cost pressures associated with its accelerated move into digital banking.

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— CNBC's Jeff Cox and Pippa Stevens contributed to this market report.