Eurozone confidence improves but inflation still a burden

Mario Draghi’s commitment to boost stimulus measures if the economic outlook for the eurozone worsens seems to be yielding results.

The European Central Bank boss said this month that quantitative easing could be expanded if oil prices and emerging markets continue to drag on the eurozone economy.

Now, a report shows economic confidence in the 19-nation bloc unexpectedly increased in September, thanks to improved sentiment in the industrial and services sectors.

According to the European Commission, the index of executive and consumer confidence rose to 105.6 this month from a revised 104.1 in August.

A measure of manufacturing and services output for the eurozone points to growth of 0.4 per cent in the third quarter thanks to rising demand.

But price growth remains a worry for now as inflation has barely risen since the Bank launched its 1.1 trillion-euro QE programme back in March.

In fact core inflation slowed to 0.9 per cent in August from one per cent in July and data for September is likely to show a rate of zero.