* FTSEurofirst 300 index rises 0.2 percent
* Novo Nordisk gains on U.S. setback for rivals
* Investors eye British government spending review
By Joanne Frearson
LONDON, Oct 20 (Reuters) - European shares edged higher on Wednesday after the Bank of England's Monetary Policy Committee minutes boosted expectations of more quantitative easing, while Novo Nordisk gained on news of a rival's setback.
However, traders said rises could be limited ahead of a British government spending review due at 1130 GMT.
British public borrowing unexpectedly hit a record high for September and the coalition government will unveil its much-anticipated review that aims to cut public spending by 83 billion pounds by 2015.
By 0945 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.2 percent at 1,084.72 points after slipping 0.5 percent on Tuesday following China's surprise rise in interest rates.
"There is apprehension going into the UK spending review. This will dominate stocks in Europe as the UK is one of its biggest trading partners -- ramifications will be felt throughout Europe," Angus Campbell, head of sales at Capital Spreads said.
"Welfare is likely to see the biggest cuts, which could have an impact on consumer spending."
Novo Nordisk gained 6.6 percent after U.S. health regulators declined to approve a diabetes drug being developed by peers Amylin Pharmaceuticals and Eli Lilly, boosting prospects for its key new product hope Victoza.
Miners also provided support for the market, recovering some of Tuesday's losses.
BHP Billiton gained 1.2 percent after it posted a 6 percent rise in quarterly iron ore output and said it was running most of its assets at full capacity.
Global miner Rio Tinto was 1.4 percent higher after it approved a $3.1 billion iron ore expansion, staking a claim to become the world's top producer and defying industry concerns over a new Australian mining tax.
VESTAS SLIPS
On the downside, Danish wind turbine maker Vestas Wind Systems fell 3.5 percent after two banks lowered their target prices for its stock and Belgian turbine gearbox maker Hansen Transmissions cuts its sales outlook.
"The (Bank of England) minutes provide further confirmation that the Committee is moving closer to recommencing quantitative easing," Samuel Tombs of Capital Economics said.
The banking sector reversed earlier losses, with the STOXX Europe 600 Banks index up 0.2 percent after the minutes from the Oct. 6-7 policy meeting reinforced expectations the central bank is edging towards further easing.
They had fallen on concerns banks may be forced to take back mortgages after investors on Tuesday accused Bank of America of inappropriately bundling some home loans into more than $47 billion of bonds.
"There are jitters after the Bank of America mortgage foreclosure worries," Will Hedden, sales trader at IG Index, said. "We are likely to see a weakness in banking stocks."
Across Europe, the FTSE 100 index was up 0.1 percent, Germany's DAX was 0.2 percent higher and France's CAC 40 was flat.
(Reporting by Joanne Frearson; editing by Simon Jessop and David Hulmes)