(Updates prices, adds quotes and details)
By Natsuko Waki
LONDON May 15 (Reuters) - European stocks edged higher on Thursday while the euro and debt yields fell as weak euro zone growth data intensified expectations that the European Central Bank will cut interest rates next month.
Investors are betting that central banks in developed markets - including the Federal Reserve - will extend their monetary support, while some also expect China to unveil stimulus measures.
That helped push emerging market stocks to a six-month high on Thursday, while Spanish and Italian and Irish yields hit record lows after data showed euro zone growth was much weaker than expected in the first quarter.
"It looks as if they (the ECB) will adjust interest rates, and that should keep equity markets supported," said Berkeley Futures associate director Richard Griffiths.
A separate reading confirmed inflation remained in the ECB's "danger zone" below 1 percent in April despite a modest pick-up, while the central bank's own survey of independent forecasters cut the inflation outlook for this year, 2015 and 2016.
ECB President Mario Draghi signalled last week that it was poised to ease monetary policy next month to support the euro zone economy. Comments by Federal Reserve Chair Janet Yellen have also suggested continued support for the U.S. economy.
European stocks rose 0.2 percent, having hit a six-year peak, while Germany's DAX set a new record high. Asian stocks gained 0.25 percent and emerging stocks rose by the same margin, bringing year-to-date gains to 3.8 percent.
The MSCI world equity index was steady.
The euro fell nearly 0.4 percent to $1.3649, an 11-week low, while Germany's 10-year Bund yield hit its lowest in a year at 1.35 percent.
"The ECB has so many options on the table for June that it is difficult to go and buy the euro," said Ian Gunner, portfolio manager at Altana Hard Currency Fund. "But another rate cut will definitely not be good enough."
ECB policymaker Yves Mersch said the bank's toolbox includes a negative rate on banks' deposits and other measures.
Sources told Reuters the ECB is preparing a package of policy options for its June meeting, including cuts in all its interest rates and targeted measures aimed at boosting lending to small and mid-sized firms.
U.S. crude oil and Brent crude futures both fell. The dollar rose 0.15 percent against a basket of six major currencies. (Additional reporting by Marius Zaharia and Sudip Kar-Gupta; Editing by Catherine Evans)