Europe’s Economic Sentiment Rises Despite Deflation Threat

Euro zone economic sentiment rose more than expected in December and inflation expectations picked up, data showed on Thursday, easing some pressure on the European Central Bank to loosen monetary strings further.

Sentiment in the euro zone’s southern, peripheral economies improved more than in core Germany and France.

Economic sentiment in the 17 countries sharing the euro in the month strengthened by 1.6 points to 100.0 in the eight straight month of gains, beating economists’ expectations, data from the European Commission showed on Thursday.

Economists polled by Reuters had expected an improvement only to 99.1 points. The more optimistic numbers come as the ECB meets on interest rates, concerned that low consumer inflation risks being stuck in what the bank considers a ‘danger zone’ for tipping into deflation.

via Reuters

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