Euro zone economic sentiment unexpectedly rose to its highest since mid-2001 in April as business turned more upbeat despite stagnant consumer morale, the European Commission said this morning.
Inflation in the bloc rose to 2 per cent in the same month from 1.7 per cent in March, the European Union's statistics office, Eurostat, said. That compared with economists' expectations of 1.9 per cent and the European Central Bank's goal of keeping inflation below but close to 2 per cent.
The data will underpin expectations that the euro zone economic recovery will gather momentum during this year - a prospect that ECB officials have been holding out in recent days.
The ECB's key interest rate is 2 per cent. Economic sentiment index rose to 96.6, its highest since July 2001, from a revised 96.1 in March, the Commission said.
Last month's figure had previously been reported as 96.0. The increase was led by an improvement in business morale that was echoed by a separate business climate indicator, which hit three-year highs as it posted its biggest monthly rise in almost two decades.
Economists polled by Reuters had expected an overall reading of 96, with the business sentiment and consumer sentiment components forecast to stay unchanged from the previous month at minus 7 and minus 14 respectively.
The consumer index matched their forecasts as a slight improvement in households' views on their financial situation in the coming year was offset by a deterioration in expectations about the outlook for unemployment and a growing reluctance to make major purchases in the coming year.