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Euro zone business strong as ECB ponders next move

Tuesday, October 24, 2017 - 01:49

Private sector growth across the euro zone slowed more sharply than predicted this month, a survey showed. But as Sonia legg reports, activity remained strong even though firms increased prices at the steepest rate in over six years.

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A head for heights helps for some at BASF but its business is on the up across departments. Third quarter operating profit, before interest and tax, rose 16 percent to 1.8 billion euros. And the chemicals group isn't the only firm doing well in Germany. October data from IHS Markit showed the private sector posted the highest increase in new orders in more than six years. The region's overall figure for the sector wasn't bad either. It slowed from last month but remained close to 56 points, well above the 50 mark that indicates growth. ECB governor Mario Draghi will no doubt take note - just two days ahead of a key policy meeting. (SOUNDBITE), CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN, SAYING: "I think that the very short term data, given this is driven off the largesse of the European Central Bank, will have remarkably little impact on Mr Draghi's policy. What he wants to see is sound underlying self-generating sustainable growth." Catalonia's independence drive has affected markets. But there's no sign it's hurting the euro zone's recovery. Fourth quarter growth across the bloc should top 0.6 percent. That's better than forecast although not yet strong enough for some. (SOUNDBITE), CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN, SAYING: "I think it's extremely dangerous to tamper with a recovery that is yet so fragile and we have real challenges ahead in terms of the resolution of the target to imbalances. And if I were Mr. Draghi I would be most certainly remaining highly accommodative." France's business rebound also showed no sign of slowing. And there were healthy increases in the euro zone's employment index, output prices and factory growth. The dominant service industry was the only disappointment - down almost one point. But few expect the ECB to reign in stimulus too much yet.

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Euro zone business strong as ECB ponders next move

Tuesday, October 24, 2017 - 01:49