Eurozone economic confidence edges higher in September

Economic confidence in the Eurozone edged slightly higher in September, as the region seemed untroubled by a potential slowdown in China.

According to data released on Tuesday by the European Commission, the economic sentiment indicator – which combines the business and consumer measures – rose from 104.1 in August to 105.6 in September, reaching its highest level since June 2011.

Analysts had expected the index to remain unchanged from the previous month.

Meanwhile, the sub-index tracking industrial confidence exceeded expectations, coming at -2.0 against consensus of a -3.8 reading and compared with the 3.7 figure registered in the previous month.

Confidence in the services sector also picked up slightly, edging up from 10.0 to 12.0 and beating expectations for a flat reading, while the business climate indicator jumped from 0.20 to 0.34, ahead of consensus estimates for an increase to 0.21.

Consumer confidence edged slightly higher in September, rising from -7.1 to -7.0, with forecasts calling for an unchanged figure.

Analysts said that the reading was consistent on past form with annual GDP growth picking up from 1.5% in the second quarter to less than 2.0% in the third quarter.

"However, that would suggest little change in quarterly GDP growth of 0.4%," said Jack Allen, European economist at Capital Economics.

"These growth rates would do little to use up the remaining slack in the economy and hence put significant upward pressure on inflation.

"And there is a clear danger that growth begins to slow soon as the boosts from lower oil prices and the weakening of the euro start to fade, or if the Greek crisis re-intensifies."