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Euro zone growth strong, doubts remain

Friday, October 23, 2015 - 01:34

Euro zone business activity picked up more than expected in October, nonetheless, expectations are high that the ECB is ready to provide more stimulus to further stoke growth. Kirsty Basset reports.

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A pleasant surprise for policymakers, with euro zone business activity in October, as measured by Markit, performing above expectations, helped along by solid results from Germany and France. But analysts say it doesn't necessarily show the euro zone is brushing off broader concerns such as falling commodity prices and the slowdown in China. CCLA's James Bevan. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICE, CCLA, JAMES BEVAN, SAYING: "I wish that were the case. The harsh reality is that the improvement in survey largely reflects the weakness of the euro which has obviously helped consumers have more money and also the weakness of commodities. The underlying credit remains parlous and I do still think we have a tricky way ahead." It comes a day after the European Central Bank raised expectations that even more quantitive easing could be on the cards - sending the euro to its biggest one day fall since January. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICE, CCLA, JAMES BEVAN, SAYING: "I'm sure the European Central Bank will be delighted to see that the purchasing manager surveys are holding up well. But that does not mean by a long chalk that their job is over and I fully expect they will have to take more action." European markets rallied on Friday on the prospect of more monetary support form the ECB. It also sent yields on Italian and Spanish two year government bonds into negative territory for the first time, meaning some investors are now paying to hold them. The bank's QE program will be re-examined in December.

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Euro zone growth strong, doubts remain

Friday, October 23, 2015 - 01:34