Euro zone business activity showed surprising strength in August despite firms raising prices, a survey showed, potentially weakening expectations for two more rate cuts from the European Central Bank this year.
The rebound in activity came even as firms in the 20-country currency union raised prices at a faster pace. The composite output prices index climbed to 52.9 from 52.1. The PMI for Germany suggested Europe’s largest economy – which contracted by 0.1 per cent in the second quarter – fared no better going into the second half of the year.
A PMI covering the euro zone services industry soared to 53.3 this month from 51.9, beating a poll prediction for no change.
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