What's going on?

Data out this week suggests that the eurozone economy is growing at its fastest pace this year � and it�s still being led by Germany!

What does this mean?

An important survey of eurozone businesses � called a purchasing managers’ survey � was released on Monday. Such surveys are viewed as one of the best indicators of current economic activity. Europeans are cheering as the survey data suggested the eurozone economy is growing at its fastest pace so far this year.


On Tuesday, the optimistic tone continued, as a closely-followed survey of German businesses� confidence showed its strongest reading in more than two years. After a summer soft patch, it seems the eurozone�s economy has regained the momentum it had earlier this year.

Why should I care?

The bigger picture: There are some signs that inflation is picking up.
Part of the purchasing managers’ survey asks businesses about the prices they are charging customers: it showed that prices rose by their most in five years. This is another sign that inflation is starting to rise in the eurozone – which is certainly worth keeping an eye on.


For the markets: As the eurozone economy improves, the European Central Bank (ECB) becomes more likely to ease off its aggressive actions.
The ECB is buying bonds in an effort to help boost the economy (click here for more background). As the economy improves, the need for ECB action dissipates and it becomes more likely that it will taper down its action. However, there are plenty of risks on the horizon for Europe, especially political ones as Germany, France, Italy and others head into elections in the coming year. So, it�s too early to say quite how the economy – and the ECB – will react.