Euro zone businesses expanded in January and retail sales were at their highest in almost eight years in December. As Sara Hemrajani reports, there are signs of a gain in economic momentum.
A rare cause for optimism in the euro zone. Shoppers appear to be shaking off the winter gloom and are splashing out at the till. The latest figures show retail sales in December were the highest in almost eight years. Consumers opened their wallets to buy more food, drinks, clothing, tobacco and fuel. Standard Chartered's Sarah Hewin says they're being spurred on by several factors. SOUNDBITE: Sarah Hewin, Senior Economist at Standard Chartered Bank, saying (English): "There's a strong stimulus from the European Central Bank in terms of the promise to buy more assets through the QE program. There's a strong stimulus from the fall in energy prices and that's going to deliver a big boost to growth. The cheaper euro is very positive for European producers and for European exporters. And governments are not running such tight fiscal policies." With firms slashing prices at the steepest rate in nearly five years, Europeans are feeling less cautious about spending. That's encouraging expansion in the services sector as well. The January PMI reading for the region came in at 52.7 - above the 50 mark that separates growth from contraction. Output accelerated in Germany, Spain and Italy, indicating a gain in momentum. But there's one dark spot - France. The services industry in the euro zone's second largest economy sank back into recession.