Business activity rises in the euro zone

Business activity in the eurozone picked up at its fastest pace since mid-2011 this month, and far quicker than expected, as slowing growth in France following the November 13 attacks was offset by a buoyant Germany.

While the upturn in activity may be welcomed by ECB policymakers, yesterday’s surveys showed firms again cut prices, suggesting ultra-loose monetary policy is doing little to get inflation near their 2% target.

“This upbeat survey about the European economy fell short on one important aspect though: Inflation,” said Bert Colijn at ING. “The survey indicated that despite the strongest output growth and job creation since early 2011, there was still no sign of inflationary pressures.”