Euro area optimism heads back to trend for first time since 2011

CONFIDENCE in the economy of the Eurozone is back to its long-term average level for the first time since the aborted hike in interest rates two and a half years ago.

In December, the currency union’s economic sentiment indicator hit exactly 100 for the first time since the middle of 2011, indicating that optimism is back at its long-term trend level. Confidence rose back to 100 in Spain for the first time since 2007.

“The country is reaping the benefits of serious structural reforms and looks set to return to trend growth rates very soon,” said Berenberg economist Christian Schulz.

The index also pointed to notable improvements from November in Italy and Portugal. Despite a small improvement in French sentiment, the country’s index is some way below its long-term average at 95.3.

Across the euro area’s sectors, confidence from services saw the largest upswing, rising by 1.1 points, although it remains some way below average.