Eurozone economic confidence hits its highest point since 2001

Jasper Jolly
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A worker checks a car at the Seat factor
Confidence from European industry hit record highs (Source: Getty)

Confidence in the Eurozone economy hit a near 17-year record in October, according to a closely followed survey published today by the European Commission.

The economic sentiment indicator continued the strong upward momentum observed since autumn last year to hit a reading of 114 points, reaching the highest point since January 2001.

Industry confidence remained on the steep upward trend that started in September 2016, reaching an all-time high, while retailers' confidence surged.

Read more: Never mind the politics: Eurozone investor confidence hits a 10-year high

The Eurozone economy has been buoyed during 2017 by a remarkable turnaround from the middle of last year, when political developments threatened to sow chaos throughout the bloc.

While the ongoing constitutional crisis in Catalonia, Spain's wealthiest region, is expected to drag on growth, the Spanish economy grew by 0.8 per cent in the third quarter, double the rate of the UK, according to data released today by the Spanish National Institute of Statistics.

Economic growth across the Eurozone as a whole over the third quarter, due to be reported tomorrow, is expected to have stayed strong at 0.6 per cent.

Read more: DEBATE: ­­Is it time for the ECB to end its stimulus programme?

The European Commission measure of economic sentiment is seen as a leading indicator for growth which suggests "economic momentum is improving further", according to Carsten Hesse, European economist at Berenberg, a German bank.

The headline measure is "incredible, but most likely too good to be true", said Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics. Nevertheless, economists should expect the Eurozone to grow at a steady rate this year.

Over the course of 2017 a series of political risk events have passed without damaging the Eurozone economy, including the election of Emmanuel Macron as French President and elections in Austria and the Netherlands.

Read more: New data suggests growth will continue in the Eurozone but ease in the UK

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