Europea stocks fall, bond yields rise as ECB raises 2016 inflation forecast

LONDON, March 5 (Reuters) - European stocks cut gains and euro zone bond yields rose on Thursday after the European Central Bank lifted its 2016 inflation forecast to 1.5 percent from 1.3 percent.

The euro, which hit a more than 11-year low earlier on Thursday, hit the day's high at $1.1115 before retreating to stand flat on the day at $1.1080.

The pan-European FTSEurofirst 300 index trimmed its gains to trade 0.3 percent higher at 1,560.99 points.

German Bund futures fell as low as 158.06, having traded around 158.45 when ECB President Mario Draghi started his news conference.

The ECB sees 2017 inflation at 1.8 percent. It cut its 2015 forecast to 0.0 percent from 0.7 percent. The central bank sees the euro zone economy growing 1.5 percent this year, compared with a previous expectation for a 1.0 percent growth.

"The GDP and inflation estimates were good. This might annoy the market regarding a possible discontinuation of QE, Vincenzo Longo, a strategist at IG (LSE: IGG.L - news) , said. (Reporting by London markets; Writing by Marius Zaharia, editing by Nigel Stephenson)