(Reuters) – European stocks inched higher on Friday in cautious trading ahead of U.S. jobs data, with economic recovery hopes putting the main index on course for its third straight week of gains.

The pan-European STOXX 600 index was up 0.1%, trading just below its record high hit earlier this week. It was on track to record a 0.5% weekly rise, boosted by automakers and commodity stocks.

All eyes are on the U.S. May payrolls data later in the day, with a strong reading expected to reinforce expectations the Federal Reserve would pare back its massive stimulus programme quicker than expected.

A survey on Thursday showed euro zone business activity surged in May as the easing of some coronavirus related restrictions injected life into the bloc’s dominant services industry.

The data comes ahead of the Fed and the European Central Bank’s policy meeting next week, where investors will watch for hints on tapering of their large bond purchase programmes.

“It is too soon for the ECB to begin even hinting at any form of monetary tightening, even with economic growth improving,” BCA Research analysts wrote in a note. “While headline inflation pushed above the central bank’s 2% target in May, core inflation only rose to 0.9%.”

Shares in British Airways-owner IAG, Wizz Air and easyJet slipped between 1%-2% after Britain added seven countries, including Egypt and Sri Lanka, to its “red list” of destinations that require hotel quarantine on return to England.

Ryanair slipped 1.2% even as its chief executive officer forecast unrestricted movement between Europe and Britain from July onwards.

French media giant Vivendi, which owns Universal Music Group, slipped 0.1% after early gains on news billionaire William Ackman’s Pershing Square Tontine was in talks to buy 10% of the music label for around $4 billion.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)