Stocks jump on strong eurozone economic data, but UK shows signs of lagging

'The eurozone economy is firing on all cylinders again as reopening has had the expected positive effect on growth', says analyst

A survey showed business activity in the eurozone has been strong this month as a rapid Covid-19 vaccination drive allowed more firms to reopen and customers to venture out. File picture: Sean Gallup/Getty Images

European stocks rebounded after their worst week in six months on the back of data showing a strong rise in business activity in the eurozone this month.

Shares were up 0.7% after a 1.5% fall last week, while oil prices also rebounded – by 5% – following seven consecutive days of price falls.

A survey showed business activity in the eurozone has been strong this month as a rapid Covid-19 vaccination drive allowed more firms to reopen and customers to venture out.

Without ongoing supply chain disruptions, activity could have expanded faster, but fears new coronavirus variants may lead to renewed restrictions continued to dent optimism.

"The eurozone economy is firing on all cylinders again as reopening has had the expected positive effect on growth. Concerns about the impact of the Delta variant and input shortages remain but have not derailed the rebound thus far," said Bert Colijn at ING.

Staff shortages

Meanwhile, new data shows Britain’s economy grew at the slowest pace since the height of lockdown in February, which companies blamed on staff shortages that left them unable to meet demand.

The country’s services and manufacturing sectors showed the lowest level of activity in six months.

While almost all restrictions in the UK have been lifted, Covid cases remain high, meaning the number of companies saying shortages of staff and materials were hurting growth was a record 14 times the normal level. Still, efforts to rebuild capacity prompted the fastest rise in employment numbers since 1998.

• Reuters and Bloomberg