Confidence in the eurozone economy hit a four-year high in July and the European Central Bank said recovery is picking up, supported by loose monetary policy aimed at countering persistently low inflation.

Economic sentiment in the eurozone rose to a seven-month high and German unemployment dropped, keeping the region on a recovery path as the ECB prepares to unleash its quantitative-easing programme.

Germany’s unemployment rate dipped to 6.5% in September as hiring picked up after the summer break, new figures show.