Confidence in the euro-area economy unexpectedly improved in October for a fourth consecutive month as the European Central Bank debates further stimulus.
An index of executive and consumer confidence climbed to 105.9 from 105.6 the previous month, the European Commission in Brussels said on Thursday. Economists forecast a decline to 105.1, according to the median of 27 estimates in a Bloomberg survey.
ECB president Mario Draghi hinted last week that more stimulus is in the pipeline to push up inflation in the 19- nation region. While acknowledging that the domestic economy remains resilient, he pointed to a slowdown in emerging markets and risks from lower energy costs and a stronger euro. The inflation rate probably stood at zero in October, economists said before a report on Friday.
The boost in confidence was driven by improvements in industry, retail trade and construction, according to the report. Sentiment deteriorated in the services sector and among consumers.
Looking ahead, the picture for the recovery is mixed. While a Purchasing Managers’ Index of manufacturing and services unexpectedly increased in October, signaling a pickup in activity, indicators this week give reason for concern. In Germany, Europe’s largest economy, business confidence fell for the first time in four months, the Ifo institute said on Monday. Across the euro area, unemployment stood unchanged at 11 per cent in September for the third consecutive month, according to a separate survey before data on Friday.
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