Euro zone business activity has accelerated at its fastest pace in more than four years last month. But as David Pollard reports the surveys highlight an ongoing divergence between the health of the bloc's biggest economies.
A rich menu of data for the ECB as it prepared for its latest policy announcement. Some of it quite tasty. Euro zone business activity accelerated at its fastest pace in more than four years last month, according to the latest PMI numbers. That on the best performance from Italy in over four years and an ever-strengthening Germany. And shoppers have been buying again. Retail sales returned to growth in July after a dip in June - cheap fuel boosting demand. And there was more good news from Spain. Jobless numbers there dropped sharply last month - down 8.1 per cent year-on-year. Spain now a star performer, according to Mint Partners strategist, Bill Blain. SOUNDBITE (English) BILL BLAIN, CAPITAL MARKETS STRATEGIST, MINT PARTNERS, SAYING: ''It's the one that's done most to reform its economy. As a result, it's the one that looks likely to grow most, so if you're looking for opportunities, that's probably where to start.'' Not quite so appetising were factory gate prices. July's numbers down 2.1 per cent year-on-year - that's after Monday's numbers showed consumer prices rising just 0.2 per cent. With China's slowdown feeding an old euro zone worry ..... SOUNDBITE (English) BILL BLAIN, CAPITAL MARKETS STRATEGIST, MINT PARTNERS, SAYING: ''One of the big risks that we're seeing coming out of the China crisis is the threat of exported deflation and a third deflationary crisis and it certainly does seem to be happening. We are seeing global growth estimates downgraded on the back of a further deflationary wave.'' And despite the upbeat feel to the day's numbers, the latest PMIs may still point to only modest third-quarter growth - of around 0.4 per cent.