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| UK service sector growth slips but eurozone 'firing on all cylinders' - business live | UK service sector growth slips but eurozone 'firing on all cylinders' - business live |
| (35 minutes later) | |
| 2.11pm GMT | |
| 14:11 | |
| Meanwhile Greece’s prime minister Alexis Tsipras appears positive about the current talks with creditors: | |
| [BREAKING] Greek PM Tsipras: No reason why we can’t reach a technical agreement by March 20 $EURUSD | |
| Updated | |
| at 2.27pm GMT | |
| 2.09pm GMT | |
| 14:09 | |
| Helena Smith | |
| Over to Greece where politicians, economists and policy makers have been discussing the county’s outlook at the annual Delphi Economic Forum. Our correspondent Helena Smith caught up with Greece’s Tourism chief there: | |
| Tourism, Greece’s great economic engine, is about to sputter into action, with a new record that will finally help generate growth. | |
| Speaking to the Guardian on the sidelines of the Delphi Economic Forum, Greece’s Tourism chief Andreas Andreadis said figures released by airport authorities showed an extra 1.5 million airline seats were planned this year. | |
| “With the expected increase in seat occupancy we will see around two million more arrivals with around 200,000 of that number from the UK. This time, last year, we were in the midst of the refugee crisis and Spain was the big winner. Now Greece is the big winner.” | |
| The boost will bring in an anticipated €1bn in extra revenues which would grow GDP by about one percent, he said. Last year sector revenues had declined despite the evident rise in arrivals with visitors spending much less per capita. | |
| “This will be another record year but, more importantly, it will be a year when real growth will start and tourism will be the main reason,” Andreadis added insisting that what Greece most needed was a ten-year growth plan and a roadmap to implement it. | |
| “The memoranda,” he said referring to the terms and conditions attached to the three bailouts Athens has received since 2010, “will not lead us out of crisis. What we need is vision and a roadmap to implement it.” | |
| Updated | |
| at 2.11pm GMT | |
| 1.43pm GMT | 1.43pm GMT |
| 13:43 | 13:43 |
| Gold is set for its biggest weekly fall for nearly four months on the growing prospect of a US rate rise in March. | Gold is set for its biggest weekly fall for nearly four months on the growing prospect of a US rate rise in March. |
| The precious metal is priced in dollars and so is sensitive to increases in the US currency. It is currently down $5 an ounce at $1,229. | The precious metal is priced in dollars and so is sensitive to increases in the US currency. It is currently down $5 an ounce at $1,229. |
| But oil has edged higher, recovering a little from recent falls on concerns about whether Russia would cut production in line with a recent deal among producers. Brent crude is up 0.47% at $55.34 a barrel. Fawad Razaqzada, technical analyst at Forex.com, said: | But oil has edged higher, recovering a little from recent falls on concerns about whether Russia would cut production in line with a recent deal among producers. Brent crude is up 0.47% at $55.34 a barrel. Fawad Razaqzada, technical analyst at Forex.com, said: |
| Both oil contracts have bounced back a little after Thursday’s sharp plunge. The all-time high crude stockpile levels in the US is the number one reason behind oil’s inability to move further higher in recent weeks. With net long positions on both contracts being at record high levels, it could be that money managers and other large speculators are beginning to unwind those positions, providing additional pressure on prices. The latest positioning data from the CFTC tonight and ICE on Monday may reflect this view point. Also, the fact that there were no further cuts in Russian oil production in February means it will take a little bit longer for the global oversupply to drain. | Both oil contracts have bounced back a little after Thursday’s sharp plunge. The all-time high crude stockpile levels in the US is the number one reason behind oil’s inability to move further higher in recent weeks. With net long positions on both contracts being at record high levels, it could be that money managers and other large speculators are beginning to unwind those positions, providing additional pressure on prices. The latest positioning data from the CFTC tonight and ICE on Monday may reflect this view point. Also, the fact that there were no further cuts in Russian oil production in February means it will take a little bit longer for the global oversupply to drain. |
| Essentially though, the long-term bearish trend has ended and I still think prices will break further higher later on this year as evidence of a tighter oil market emerges. | Essentially though, the long-term bearish trend has ended and I still think prices will break further higher later on this year as evidence of a tighter oil market emerges. |
| Updated | Updated |
| at 1.46pm GMT | at 1.46pm GMT |
| 12.28pm GMT | 12.28pm GMT |
| 12:28 | 12:28 |
| Weakness in the pound after the dip in UK service sector growth has done little to prop up the FTSE 100. | Weakness in the pound after the dip in UK service sector growth has done little to prop up the FTSE 100. |
| Normally a dip in sterling would boost the leading index due to its preponderance of overseas earners, but it is currently down 0.22% at 7366. The pound is 0.34% lower at $1.2224 against the dollar - having earlier dropped to $1.2215 - and down 0.67% against the euro at €1.1594. Connor Campbell, financial analyst at Spreadex, said: | Normally a dip in sterling would boost the leading index due to its preponderance of overseas earners, but it is currently down 0.22% at 7366. The pound is 0.34% lower at $1.2224 against the dollar - having earlier dropped to $1.2215 - and down 0.67% against the euro at €1.1594. Connor Campbell, financial analyst at Spreadex, said: |
| Part of the reason sterling’s slide against the euro was so aggressive was that the Eurozone’s own services PMI hit a near 6 year peak of 55.5 (a smidge lower than what was forecast). This prevented the DAX from getting out of the red, the German index shedding 30 points; the CAC, however, managed to rise 0.5% thanks to the most recent French election polls placing Emmanuel Macron ahead of Marine Le Pen in the first round of voting. | Part of the reason sterling’s slide against the euro was so aggressive was that the Eurozone’s own services PMI hit a near 6 year peak of 55.5 (a smidge lower than what was forecast). This prevented the DAX from getting out of the red, the German index shedding 30 points; the CAC, however, managed to rise 0.5% thanks to the most recent French election polls placing Emmanuel Macron ahead of Marine Le Pen in the first round of voting. |
| 11.22am GMT | 11.22am GMT |
| 11:22 | 11:22 |
| Snap shares set to open higher after stratospheric debut | Snap shares set to open higher after stratospheric debut |
| After Snap’s jet-fuelled stock market debut on Thursday - a 44% surge which values the Snapchat owner at $28bn - the company’s shares are being indicated higher again. | After Snap’s jet-fuelled stock market debut on Thursday - a 44% surge which values the Snapchat owner at $28bn - the company’s shares are being indicated higher again. |
| The future market is currently showing a 1.3% rise to $24.80, but now the company is listed it has to prove itself, say analysts. Chris Beauchamp, chief market analyst at IG, said: | The future market is currently showing a 1.3% rise to $24.80, but now the company is listed it has to prove itself, say analysts. Chris Beauchamp, chief market analyst at IG, said: |
| Snap duly delivered on the hype that surrounded its IPO, with a 44% gain in the share price on day one echoing the heady days of the dot-com bubble. The underwriters and company management will be pleased to see the stock in such high demand, but the easy work is now behind it. Snap is now just another company on the New York stock exchange, and will be judged by the same metrics as others of its ilk. It has to show real user growth from this point onwards, and a firm strategy for making money off those users. | Snap duly delivered on the hype that surrounded its IPO, with a 44% gain in the share price on day one echoing the heady days of the dot-com bubble. The underwriters and company management will be pleased to see the stock in such high demand, but the easy work is now behind it. Snap is now just another company on the New York stock exchange, and will be judged by the same metrics as others of its ilk. It has to show real user growth from this point onwards, and a firm strategy for making money off those users. |
| And Garry White, chief investment commentator at Charles Stanley, warned: | And Garry White, chief investment commentator at Charles Stanley, warned: |
| For a company that is losing almost half a billion dollars a year, may never be profitable and faces aggressive competition from larger peers, this valuation seems stratospheric. The reason is the company’s popularity with teenagers and millennials, who are prized targets for advertisers. However, this industry remains extremely fickle (remember MySpace and Friends Reunited?) and many investors piling in not wishing to miss “the next big thing” are unlikely to have used the app themselves. Investors tend not to be teenagers. Warren Buffett says he will never invest in a business he doesn’t understand, this may be advice well worth heeding for those tempted to take a nibble of Snap. | For a company that is losing almost half a billion dollars a year, may never be profitable and faces aggressive competition from larger peers, this valuation seems stratospheric. The reason is the company’s popularity with teenagers and millennials, who are prized targets for advertisers. However, this industry remains extremely fickle (remember MySpace and Friends Reunited?) and many investors piling in not wishing to miss “the next big thing” are unlikely to have used the app themselves. Investors tend not to be teenagers. Warren Buffett says he will never invest in a business he doesn’t understand, this may be advice well worth heeding for those tempted to take a nibble of Snap. |
| 10.57am GMT | 10.57am GMT |
| 10:57 | 10:57 |
| Over in Greece, the country’s prime minister tweets: | Over in Greece, the country’s prime minister tweets: |
| Meeting with the French PM @BCazeneuve today in Athens. France's support to Greece in major challenges has been invaluable. pic.twitter.com/9eY6eE76sF | Meeting with the French PM @BCazeneuve today in Athens. France's support to Greece in major challenges has been invaluable. pic.twitter.com/9eY6eE76sF |
| 10.44am GMT | 10.44am GMT |
| 10:44 | 10:44 |
| UK 'heading for stagflation' | UK 'heading for stagflation' |
| The UK is entering stagflation - high inflation and stagnant growth - warns Samuel Tombs, chief UK economist at Pantheon Macroeconomics. He said: | The UK is entering stagflation - high inflation and stagnant growth - warns Samuel Tombs, chief UK economist at Pantheon Macroeconomics. He said: |
| The decline in the services PMI to a five-month low in February is the clearest sign yet that the U.K. now is enduring stagflation. | The decline in the services PMI to a five-month low in February is the clearest sign yet that the U.K. now is enduring stagflation. |
| The business activity index is consistent with quarter-on-quarter growth in output in the non-distribution private services sector slowing to around 0.2% in the first quarter from 0.7% in the fourth quarter. Granted, the PMI often is influenced excessively by sentiment and it was far too downbeat immediately after the referendum. But the recent rally in equity prices should have boosted corporate confidence. In addition, the services PMI was too downbeat last year because it excludes the retail sector, which benefited from a surge in consumer spending. Evidence on retail spending so far this year has been disappointingly weak. | The business activity index is consistent with quarter-on-quarter growth in output in the non-distribution private services sector slowing to around 0.2% in the first quarter from 0.7% in the fourth quarter. Granted, the PMI often is influenced excessively by sentiment and it was far too downbeat immediately after the referendum. But the recent rally in equity prices should have boosted corporate confidence. In addition, the services PMI was too downbeat last year because it excludes the retail sector, which benefited from a surge in consumer spending. Evidence on retail spending so far this year has been disappointingly weak. |
| The services sector looks vulnerable to slowing sharply over the coming months now that businesses are rising prices rapidly. Indeed, the output prices balance rose to 54.1 in February—its highest level since September 2008—from 53.7 in January. In the past, the business activity index has tended to weaken over the following six months whenever the output prices index has exceeded 52. Accordingly, we continue to expect quarter-on-quarter GDP growth to average just 0.2% this year, ensuring that the MPC holds back from raising interest rates despite high inflation. | The services sector looks vulnerable to slowing sharply over the coming months now that businesses are rising prices rapidly. Indeed, the output prices balance rose to 54.1 in February—its highest level since September 2008—from 53.7 in January. In the past, the business activity index has tended to weaken over the following six months whenever the output prices index has exceeded 52. Accordingly, we continue to expect quarter-on-quarter GDP growth to average just 0.2% this year, ensuring that the MPC holds back from raising interest rates despite high inflation. |
| 10.41am GMT | 10.41am GMT |
| 10:41 | 10:41 |
| Back with the UK, and the PMI data confirms the country’s economy is likely to see slower growth this year, according to Daniel Vernazza, lead UK economist at UniCredit Research. He said: | Back with the UK, and the PMI data confirms the country’s economy is likely to see slower growth this year, according to Daniel Vernazza, lead UK economist at UniCredit Research. He said: |
| The bigger than expected fall in the services PMI adds to the mounting evidence in recent weeks that the UK economy is slowing. It fits with the recent fall in retail sales amid a squeeze in real household income growth. We continue to expect growth to slow this year and for the UK economy to decouple from firming global economic activity... | The bigger than expected fall in the services PMI adds to the mounting evidence in recent weeks that the UK economy is slowing. It fits with the recent fall in retail sales amid a squeeze in real household income growth. We continue to expect growth to slow this year and for the UK economy to decouple from firming global economic activity... |
| The weaker headline figure, which refers to output/business activity, was also reflected in the detail of the report. The new orders balance fell 1.3pts. to 54.7, and both backlogs-of-work and future business expectations edged down. Set against this, the employment balance rose. | The weaker headline figure, which refers to output/business activity, was also reflected in the detail of the report. The new orders balance fell 1.3pts. to 54.7, and both backlogs-of-work and future business expectations edged down. Set against this, the employment balance rose. |
| There are two salient explanations for the recent softness. First, the squeeze in real household income growth (resulting from higher imported inflation) is weighing on demand, particularly for retail services... | There are two salient explanations for the recent softness. First, the squeeze in real household income growth (resulting from higher imported inflation) is weighing on demand, particularly for retail services... |
| Second, Brexit-related economic uncertainty remains high and this will increasingly weigh on business investment as the date when the UK formally leaves the EU (spring 2019) approaches. | Second, Brexit-related economic uncertainty remains high and this will increasingly weigh on business investment as the date when the UK formally leaves the EU (spring 2019) approaches. |
| The composite PMI... fell to 53.6 in February, down from an average of 55.4 in the final quarter of last year. The sectorial breakdown clearly reveals that the weakness in the UK economy is domestic, with the export-oriented manufacturing sector performing relatively well and supported by the past depreciation of sterling and firming global economic activity (particularly in Europe). Based on the historical relationship between the composite PMI and real GDP growth, the PMIs in February would be consistent with a quarterly real GDP growth rate of around 0.3%-0.4% quarter on quarter. We keep our forecast for first quarter 2017 real GDP growth of 0.3% quarter on quarter. | The composite PMI... fell to 53.6 in February, down from an average of 55.4 in the final quarter of last year. The sectorial breakdown clearly reveals that the weakness in the UK economy is domestic, with the export-oriented manufacturing sector performing relatively well and supported by the past depreciation of sterling and firming global economic activity (particularly in Europe). Based on the historical relationship between the composite PMI and real GDP growth, the PMIs in February would be consistent with a quarterly real GDP growth rate of around 0.3%-0.4% quarter on quarter. We keep our forecast for first quarter 2017 real GDP growth of 0.3% quarter on quarter. |
| 10.31am GMT | 10.31am GMT |
| 10:31 | 10:31 |
| Despite weak eurozone retail sales figures, shopkeepers remain optimistic about the outlook, says economist Bert Colijn at ING Bank: | Despite weak eurozone retail sales figures, shopkeepers remain optimistic about the outlook, says economist Bert Colijn at ING Bank: |
| Not all that glitters is gold as strong Eurozone economic surveys mask weak performance in retail at the start of the year. The outlook for domestic demand does remain positive though, even under higher inflation rates. | Not all that glitters is gold as strong Eurozone economic surveys mask weak performance in retail at the start of the year. The outlook for domestic demand does remain positive though, even under higher inflation rates. |
| While surveys about the Eurozone economy in 2017 have been very upbeat so far, retail sales disappointed in January. The 0.1% month on month decline is the third in a row, while year on year growth is just 1.2%. This suggests that recent Eurozone optimism is not translating into more shopping at the moment. | While surveys about the Eurozone economy in 2017 have been very upbeat so far, retail sales disappointed in January. The 0.1% month on month decline is the third in a row, while year on year growth is just 1.2%. This suggests that recent Eurozone optimism is not translating into more shopping at the moment. |
| One factor probably influencing this is the rebound of inflation in recent months, bringing price growth back to 2% in the Eurozone. Nominal wage growth has been below 2% since 2013, indicating that real wages are suffering from the recent rebound in prices. | One factor probably influencing this is the rebound of inflation in recent months, bringing price growth back to 2% in the Eurozone. Nominal wage growth has been below 2% since 2013, indicating that real wages are suffering from the recent rebound in prices. |
| Retailers confirmed the current weakness in demand in the Economic Sentiment Indicator as the February survey showed a strong decline in the assessment of the present business situation. | Retailers confirmed the current weakness in demand in the Economic Sentiment Indicator as the February survey showed a strong decline in the assessment of the present business situation. |
| Even though recent months have disappointed, retailers do remain optimistic about business in the months ahead. This probably makes sense, given the strength in the job market and relative optimism among consumers. | Even though recent months have disappointed, retailers do remain optimistic about business in the months ahead. This probably makes sense, given the strength in the job market and relative optimism among consumers. |
| Today’s composite PMI numbers confirm that strength in the economy. Still though, this could be a sign for Eurozone growth that domestic demand could be impacted by declining real wages, although we expect consumer spending to remain robust in the first quarter. | Today’s composite PMI numbers confirm that strength in the economy. Still though, this could be a sign for Eurozone growth that domestic demand could be impacted by declining real wages, although we expect consumer spending to remain robust in the first quarter. |
| Updated | Updated |
| at 10.37am GMT | at 10.37am GMT |
| 10.12am GMT | 10.12am GMT |
| 10:12 | 10:12 |
| Eurozone retail sales slip | Eurozone retail sales slip |
| The eurozone may be starting to fire on all cylinders according to the PMIs, but the region’s shopkeepers may not agree. | The eurozone may be starting to fire on all cylinders according to the PMIs, but the region’s shopkeepers may not agree. |
| Eurozone retail sales fell by 0.1% month on month in January, the third fall in a row and contradicting expectations of a 0.4% increase. The year on year figure was a rise of 1.2% but this was lower than the forecast 1.6% increase. | Eurozone retail sales fell by 0.1% month on month in January, the third fall in a row and contradicting expectations of a 0.4% increase. The year on year figure was a rise of 1.2% but this was lower than the forecast 1.6% increase. |
| The December figure was revised down from a 0.3% fall to one of 0.5% despite the supposed boost from Christmas shoppers. | The December figure was revised down from a 0.3% fall to one of 0.5% despite the supposed boost from Christmas shoppers. |
| 10.00am GMT | 10.00am GMT |
| 10:00 | 10:00 |
| Ben Brettell, senior economist at Hargreaves Lansdown, said: | Ben Brettell, senior economist at Hargreaves Lansdown, said: |
| The pace of growth in the UK services sector, which accounts for more than three-quarters of GDP, slipped slightly in February according to survey data released today... | The pace of growth in the UK services sector, which accounts for more than three-quarters of GDP, slipped slightly in February according to survey data released today... |
| 2017 looks set to be a relatively challenging year for the economy, with higher inflation and weaker pay growth likely to squeeze household budgets. This means consumer spending could slow in real terms. Today’s figure, along with the equivalent readings for the manufacturing and construction sectors, point to 0.4% GDP growth in the first quarter. | 2017 looks set to be a relatively challenging year for the economy, with higher inflation and weaker pay growth likely to squeeze household budgets. This means consumer spending could slow in real terms. Today’s figure, along with the equivalent readings for the manufacturing and construction sectors, point to 0.4% GDP growth in the first quarter. |
| Overall, however, the economic picture remains more positive than many expected after last year’s vote to leave the EU. A PMI reading above 50 shows the sector is still expanding, albeit at its slowest pace since September. The survey showed that business confidence remained strong, and sentiment about the rest of the year was largely positive. Nevertheless, with uncertainty still rife over how and when the UK will actually leave the EU, and survey data pointing to a modest slowing of activity, the Bank of England looks most unlikely to consider raising interest rates in the near to medium term. | Overall, however, the economic picture remains more positive than many expected after last year’s vote to leave the EU. A PMI reading above 50 shows the sector is still expanding, albeit at its slowest pace since September. The survey showed that business confidence remained strong, and sentiment about the rest of the year was largely positive. Nevertheless, with uncertainty still rife over how and when the UK will actually leave the EU, and survey data pointing to a modest slowing of activity, the Bank of England looks most unlikely to consider raising interest rates in the near to medium term. |
| 9.47am GMT | 9.47am GMT |
| 09:47 | 09:47 |
| The pound slipped back to a day’s low of $1.2227 against the dollar immediately after the PMI figures, with analysts suggesting the weakness in the economy was more likely to lead to lower interest rates for longer. | The pound slipped back to a day’s low of $1.2227 against the dollar immediately after the PMI figures, with analysts suggesting the weakness in the economy was more likely to lead to lower interest rates for longer. |
| This is a seven week low against the US currency, while the pound has also fallen against the euro, down 0.5% to €1.1617. | This is a seven week low against the US currency, while the pound has also fallen against the euro, down 0.5% to €1.1617. |
| Chris Williamson, chief business economist of survey compiler Markit, said: | Chris Williamson, chief business economist of survey compiler Markit, said: |
| Weaker consumer spending was a key cause of slower service sector growth, suggesting that household budgets are starting to crack under the strain of higher prices and weak wage growth. | Weaker consumer spending was a key cause of slower service sector growth, suggesting that household budgets are starting to crack under the strain of higher prices and weak wage growth. |
| The ongoing steep upturn in costs suggest that consumer price inflation has significantly further to rise, adding to our belief that inflation will breach 3% over the course of the next year. | The ongoing steep upturn in costs suggest that consumer price inflation has significantly further to rise, adding to our belief that inflation will breach 3% over the course of the next year. |
| Despite this, Williamson said the PMI data was more consistent with further easing by the Bank of England. He said: | Despite this, Williamson said the PMI data was more consistent with further easing by the Bank of England. He said: |
| The slowdown in the pace of economic growth signalled by the February surveys pushes the PMI back towards territory more indicative of additional policy stimulus from the Bank of England than a tightening. | The slowdown in the pace of economic growth signalled by the February surveys pushes the PMI back towards territory more indicative of additional policy stimulus from the Bank of England than a tightening. |
| Weaker UK services PMI in Feb largely linked to slowdown in consumer-facing sectors, likely due to households feeling pain of higher prices pic.twitter.com/8ts1JxrYbD | Weaker UK services PMI in Feb largely linked to slowdown in consumer-facing sectors, likely due to households feeling pain of higher prices pic.twitter.com/8ts1JxrYbD |
| UK PMIs show price pressures still at highest for 6 years. Firms report rising costs associated with the weak pound. CPI to rise further! pic.twitter.com/zwNYLdmD73 | UK PMIs show price pressures still at highest for 6 years. Firms report rising costs associated with the weak pound. CPI to rise further! pic.twitter.com/zwNYLdmD73 |
| UK 'all sector' PMI charted against historical #BoE policy changes. Latest survey data suggest policymakers to favour dovish bias pic.twitter.com/jN90clowZp | UK 'all sector' PMI charted against historical #BoE policy changes. Latest survey data suggest policymakers to favour dovish bias pic.twitter.com/jN90clowZp |
| Updated | Updated |
| at 10.59am GMT | at 10.59am GMT |
| 9.34am GMT | 9.34am GMT |
| 09:34 | 09:34 |
| UK service sector growth at five month low | UK service sector growth at five month low |
| The UK’s service sector grew more slowly than expected in February, mainly due to a slowdown in consumer spending. | The UK’s service sector grew more slowly than expected in February, mainly due to a slowdown in consumer spending. |
| The Markit/CIPS services purchasing managers index fell from 54.5 in January to 53.3, its weakest performance since last September and lower than the 54.2 figure expected by economists. | The Markit/CIPS services purchasing managers index fell from 54.5 in January to 53.3, its weakest performance since last September and lower than the 54.2 figure expected by economists. |
| Markit said the figures - along with the earlier manufacturing and construction data - suggested first quarter growth of below 0.4% compared with 0.7% in the final three months of 2016. | Markit said the figures - along with the earlier manufacturing and construction data - suggested first quarter growth of below 0.4% compared with 0.7% in the final three months of 2016. |
| The data comes ahead of this month’s Budget and ahead of the government’s plan to trigger Article 50 and begin the process of leaving the European Union. | The data comes ahead of this month’s Budget and ahead of the government’s plan to trigger Article 50 and begin the process of leaving the European Union. |
| 9.25am GMT | 9.25am GMT |
| 09:25 | 09:25 |
| The positive figures from the eurozone may not last, according to Howard Archer, chief european and UK economist at IHS Markit. He said: | The positive figures from the eurozone may not last, according to Howard Archer, chief european and UK economist at IHS Markit. He said: |
| The final purchasing managers’ survey confirmed Eurozone services activity really stepped up a gear in February to be at a 69-month high. Significantly and encouragingly, It was not only business activity that saw a long-term high, but also incoming new business, outstanding business and business expectations. Employment growth also accelerated. | The final purchasing managers’ survey confirmed Eurozone services activity really stepped up a gear in February to be at a 69-month high. Significantly and encouragingly, It was not only business activity that saw a long-term high, but also incoming new business, outstanding business and business expectations. Employment growth also accelerated. |
| Furthermore, with Eurozone manufacturing expansion picking up modestly further to a 70-month high, Markit report that overall Eurozone manufacturing and services output in February was at the best level since April 2011. | Furthermore, with Eurozone manufacturing expansion picking up modestly further to a 70-month high, Markit report that overall Eurozone manufacturing and services output in February was at the best level since April 2011. |
| The markedly overall improved February purchasing managers’ surveys indicate that the Eurozone economy is seeing a robust first quarter of 2017 after solid if unspectacular growth in the second half of 2016. | The markedly overall improved February purchasing managers’ surveys indicate that the Eurozone economy is seeing a robust first quarter of 2017 after solid if unspectacular growth in the second half of 2016. |
| However, we suspect the Eurozone may find it difficult to kick on amid appreciable political uncertainties during 2017 and likely reduced consumer purchasing power due to higher inflation and limited wage growth in most countries. A dip in Eurozone consumer confidence in February fuels this suspicion. | However, we suspect the Eurozone may find it difficult to kick on amid appreciable political uncertainties during 2017 and likely reduced consumer purchasing power due to higher inflation and limited wage growth in most countries. A dip in Eurozone consumer confidence in February fuels this suspicion. |
| Consequently, we suspect that Eurozone GDP growth will be 1.6%. | Consequently, we suspect that Eurozone GDP growth will be 1.6%. |
| 9.13am GMT | 9.13am GMT |
| 09:13 | 09:13 |
| Eurozone business growth at near six year high | Eurozone business growth at near six year high |
| The positive mood continues with news that eurozone businesses grew at their fastest rate since April 2011. | The positive mood continues with news that eurozone businesses grew at their fastest rate since April 2011. |
| The Markit composite index - manufacturing and services - rose to 56 in February from 54.4 the previous month. The service sector index itself climbed from 53.7 in January to 55.5. Markit chief business economist Chris Williamson said: | The Markit composite index - manufacturing and services - rose to 56 in February from 54.4 the previous month. The service sector index itself climbed from 53.7 in January to 55.5. Markit chief business economist Chris Williamson said: |
| The final PMI numbers paint a bright picture of a eurozone economy starting to fire on all cylinders. Growth accelerated in all of the four largest member states in February to suggest an increasingly sustainable and robust-looking upturn. | The final PMI numbers paint a bright picture of a eurozone economy starting to fire on all cylinders. Growth accelerated in all of the four largest member states in February to suggest an increasingly sustainable and robust-looking upturn. |
| The broad-based improvement has pushed the eurozone PMI into territory consistent with 0.6% GDP growth in the first quarter. The labour market is also starting to boom, with jobs being created at the fastest rate for nearly a decade. | The broad-based improvement has pushed the eurozone PMI into territory consistent with 0.6% GDP growth in the first quarter. The labour market is also starting to boom, with jobs being created at the fastest rate for nearly a decade. |
| The strength of the eurozone economy could give the European Central Bank pause for thought in its current quantitive easing and low interest rate programmes: | The strength of the eurozone economy could give the European Central Bank pause for thought in its current quantitive easing and low interest rate programmes: |
| The Markit PMIs are what triggered Bank of England easing last summer. Will the strongest readings for 6 years in the EU change ECB policy? pic.twitter.com/uDSLsmHmN9 | The Markit PMIs are what triggered Bank of England easing last summer. Will the strongest readings for 6 years in the EU change ECB policy? pic.twitter.com/uDSLsmHmN9 |
| Any change to the ECB’s policy would go down well in Germany, which has been upset by the negative effect of low interest rates on the country’s savers. | Any change to the ECB’s policy would go down well in Germany, which has been upset by the negative effect of low interest rates on the country’s savers. |