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European economic sentiment up

European economic sentiment up
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People living in the euro zone were more optimistic about the region’s economy in August.

A monthly European Commission survey showed sentiment improved in the 16 country using the euro to 101.8 points from July’s downwardly revised 101.1.

That was more than economists had expected. Inflation expectations were also muted.

The Commissioner said consumer confidence “improved markedly” – analysts believe growth will only become self-sustaining in the region if consumers start spending more.

Business and consumer confidence rose throughout the EU.

Britain led the way with a gain of 1.5 points while in the euro zone, Germany did best, rising 1.1 points.

Sentiment in Spain was surprisingly strong, it rose 0.9 points, France was less so with a 0.4 point increase, while Italy fell by nine tenths of a point.

But economists stressed that the region’s expansion is very much led by exports and that depends on continued growth in world economies, particularly the United States.

US Federal Reserve chairman Ben Bernanke was cautiously positive about growth as he addressed other fellow central bankers gathered at the Fed’s annual symposium in Jackson Hole, Wyoming at the end of last week.

European Central Bank officials meet on 2 September to consider interest rates, but the latest figures make it likely the cost of borrowing in the euro zone will remain at a historic low of one percent well into next year.