European shares extended gains on Monday after U.S. Federal Reserve Chairman Ben Bernanke warned the U.S. economy needs to grow more quickly, fueling hopes for more monetary easing.

QE3 here I come?, a German trader asked rhetorically after Bernanke's remarks to a gathering of the National Association for Business Economics were published.

By 1214 GMT, the FTSEurofirst 300 index was up 0.7 percent at 1,086.69 points, after hitting a session-high of 1,087.99.