Eurozone economy expands at fastest pace since June 2022

The eurozone economy expanded in February at its fastest pace since June 2022, according to a survey released on Friday.

The S&P Global composite purchasing managers’ index rose to 52.0 from 50.3 in January, coming in just a touch below the initial estimate of 52.3.

A reading above 50.0 signals expansion, while a reading below indicates contraction.

Meanwhile, the final eurozone services business activity index printed at 52.7 in February, up from 50.8 the month before and marking the highest level for eight months.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "A resounding expansion of business activity in February helps allay worries of a eurozone recession, for now. Doubts linger about the underlying strength of demand, especially as some of the February uplift appears to have been driven by temporary drivers, such as unseasonably warm weather and a marked improvement in supplier delivery times - likely linked in part to China’s recent reopening.

"Nevertheless, there are clear signs that business confidence has picked up from the lows seen late last year, buoyed by fewer energy market concerns, as well as signs that inflation has peaked and recession risks have eased."

He added: "There is a concern, however, that signs of persistent elevated selling price inflation, combined with the surprising resiliency of the economy, will embolden the ECB into more aggressive monetary policy tightening, which poses a downside risk to demand growth in the months ahead."