France and Germany take Eurozone confidence to eight-month high

Jake Cordell
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France and Germany flags
France and Germany were flying the flags for a stronger Eurozone recovery (Source: Getty)

The recovery in the Eurozone might still be on track as confidence jumped to a eight-month high in September.

The EU's official economic sentiment indicator (ESI), the broadest measure of optimism among businesses and consumers across the single currency area, rose to 104.9 from a score of 103.5 recorded in August. Economists had expected confidence to flat-line after a string of mixed data over the summer.

Encouragingly, the feel-good factor was on the rise across all of the Eurozone's major economies, scoring big rises in the powerhouses of both Germany and France. While there was no noticeable improvement in optimism among consumers, manufacturers and retailers reported growing order books, with the ESI score for industry running at a five-year high.

Despite the increase, analysts said the score is still running at a muted level, on an index where 100 represents the long-term average. Growth is "still too weak to drive a sustained upturn in inflation [and] as such, the European Central Bank will still need to loosen policy," said Stephen Brown, European economist at Capital Economics.