Euro zone industrial output rose more than expected in April, boding well for the currency area's fragile economic health and boosting expectations of an interest rate rise by the European Central Bank.
Industrial production in the 15 countries using the euro increased 0.9 per cent month-on-month for a 3.9 per cent annual gain, European Union statistics office Eurostat said yesterday.
Economists polled by Reuters had expected rises of 0.1 per cent month-on-month and 2.8 per cent year-on-year.
"For the ECB, this means the July rate hike is clearly on track. The ECB considers the economy strong enough to withstand a rate hike," said Holger Schmieding, co-head of European economics at Bank of America.
ECB President Jean-Claude Trichet said last week the central bank may raise its benchmark rate by a quarter point to 4.25 per cent in July as it battles against inflation running at the fastest pace in 16 years.
Eurostat revised downwards its production data for March to a 0.5 per cent fall on the month and a 1.6 per cent annual rise from the previously reported 0.2 per cent decrease and 2 per cent yearly gain.
Although economists caution the data is volatile, it gave signs consumer spending might not have been as weak across the euro zone as previously thought after a series of poor consumer sentiment indicators.
The output of durable and non-durable consumer goods in April increased 1.7 and 0.2 per cent on a monthly basis respectively and 1.0 per cent and 0.6 per cent respectively in annual terms.