Euro investors see confidence return as long recession ends

INVESTORS’ confidence in the euro area surged upward in August, as a major index of sentiment heads back into positive territory for the first time in two years.

The Sentix index rose to 6.5, the highest level since the European Central Bank’s ill-fated decision to raise interest rates in 2011, and the second largest single-month increase recorded in a decade.

The reading follows the end of recession for the currency union, revealed in data last month that may have boosted confidence. The Eurozone crept into growth in the second quarter of the year, after a year and a half of contraction.

Germany’s rebound in the Sentix index was particularly dramatic, its score rising from 8.1 to 28.4, exhibiting a very optimistic climate only two weeks ahead of an election.

Meanwhile, the Bank of France hiked forecasts yesterday, suggesting French growth in the third quarter will reach 0.2 per cent, rather than the 0.1 per cent previously expected.

However, Greece still appears to be mired in recession, as separate data out yesterday revealed one per cent deflation in the year to August, and an 8.1 per cent slump in industrial production over the same period.