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European stocks rallied, completing their biggest two-day gain since November, after China cut interest rates, adding to speculation that policy makers around the world will take steps to revive growth.

China cut interest rates for the first time since 2008, increasing its efforts to combat a deepening economic slowdown. The one-year deposit rate will drop to 3.25 percent from 3.5 percent with effect from tomorrow and the one-year lending rate will fall to 6.31 percent from 6.56 percent, the People’s Bank of China said on its website today.

The Bank of England today left its asset-purchase program on hold as the threat from above-target inflation overrode policy makers’ concern that the euro area’s debt crisis has weakened U.K. economic growth.

National benchmark indexes climbed in every western- European market that opened today except Portugal. Germany’s DAX rose 0.8 percent and the U.K.’s FTSE 100 gained 1.2 percent. France’s CAC 40 climbed 0.4 percent. Austria’s market was closed for a public holiday.

A gauge of mining companies surged 2.5 percent for the biggest advance on the Stoxx 600 after China’s central bank cuts its benchmark interest rates. Rio Tinto, the world’s third- largest mining company, increased 4 percent to 3,015 pence, while Anglo American climbed 2 percent to 2,133 pence. Xstrata Plc gained 3 percent to 966.8 pence.

Santander SA added 1.7 percent to 4.78 euros in Madrid after Spain’s bond auction helped ease concern about financing the region’s third-biggest budget deficit. Banco Bilbao Vizcaya Argentaria SA increased 1.2 percent to 5.10 euros and Banco de Sabadell SA rose 1.6 percent to 1.37 euros.