Euro zone sentiment, inflation expectations edge up in July
Reuters
Published Jul 30, 2014 06:11AM ET
Euro zone sentiment, inflation expectations edge up in July
By Martin Santa BRUSSELS (Reuters) - Euro zone economic sentiment unexpectedly improved in July while inflation expectations among consumers and companies edged up, data from the European Commission showed on Wednesday.
Consumer morale rose in three of the euro zone's five biggest economies, led by Italy and followed by France and the Netherlands, while the bloc's growth engine Germany and Spain saw sentiment worsening.
The monthly economic sentiment index for the 18 countries sharing the euro rose to 102.2 in July from a revised 102.1 in June. Economists surveyed by Reuters had forecast a drop to 101.8 in July.
While industry confidence rose on optimism about future production, confidence in the services sector declined as demand expectations weakened. Worries about jobs and the economic outlook meanwhile hit consumer confidence, the Commission said.
Consumers' inflation expectations improved marginally to 8.7 in July from 8.6 in June while companies' outlook for selling prices returned to positive territory in July for the first time in seven months.
The 9.6 trillion euro economy is still struggling to get onto a solid footing after exiting recession a year ago, with the European Union's toughening of sanctions against Russia adding to risks the fragile recovery could stall.
Last month, the European Central Bank launched broad measures to aid growth and avert deflation risks in the bloc, and said it could yet print money to support the economy.
Measures announced by Europe and the United States on Tuesday will target Russia's energy, banking and defense sectors in the strongest international action yet over Moscow's support for rebels in eastern Ukraine.
Separately, the Commission's business climate indicator, which points to the phase of the business cycle, fell to 0.17 in July from 0.21 in June, its worst reading since October 2013.
Data earlier on Wednesday showed Spain's economy grew at its fastest pace since before the financial crisis in the second quarter, although monthly consumer prices fell at their sharpest year-on-year rate in July since October 2009.
The Spanish inflation reading will be followed at 1200 GMT (8.00 a.m. EDT) by corresponding numbers for Germany, the biggest economy in the euro zone. German inflation is forecast to have risen 0.2 percent month-on-month and 0.8 percent year-on-year in July.
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(Reporting by Martin Santa; Editing by Catherine Evans)
Written By: Reuters
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