Eurozone remains confident

Julian Harris
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OVERALL economic morale across the Eurozone fell slightly this month, yet remains well above its long term average, official data revealed yesterday.

The EU’s economic sentiment indicator (ESI) came in at 106.5, after a revised 106.6 in December.

The minor slip came after seven straight months of improvement in the index, and surprised economists in a Reuters poll, who had expected a rise to 107.

However, business confidence rose for the euro area, from 1.38 to 1.58.

“The [business] indicator is approaching the historical peak reached in spring 2007, suggesting that the recovery in industry will continue in the coming months,” the commission said in a statement.

The survey also showed a sharp increase in consumer inflation expectations 12 months ahead, with the index hitting 20.9 points from a revised 15.1 in December.

In Germany, inflation picked up slightly in January, separate data showed yesterday.

The harmonised index of consumer prices (HICP) increased at an annual pace of two per cent in January, up from December but slightly lower than the 2.2 per cent expected by economists polled by Reuters.

And constraints on the supply of credit eased this month, according to a survey by the Munich-based Ifo Institute. The “credit hurdle” for German companies fell by 0.9 per cent, they said, with the economy “profiting from relatively favourable financing conditions.”