Stable euro zone private business activity was supported by surprisingly strong growth in France during August, surveys show. But, as David Pollard reports, factories could face a tougher September as new order growth stumbled.
France's critics know it as Europe's pancake economy - flat. But not in August when French services cooked up something of an unexpected treat. Their latest PMI reading of 52.0 is the highest since before the Paris attacks of last November. But with manufacturing still in contraction, they're seen as little evidence yet of a rebound. SOUNDBITE (English) CHIEF ECONOMIST, WORLD FIRST, JEREMY COOK, SAYING: "We're starting to hopefully maybe see the impact of European Central Bank stimulus on the French private sector. The key will be how long this continues. One swallow doesn't make a summer. We've seen similar blips in euro zone data over the course of the global financial crisis and they've been snuffed out pretty readily by fears elsewhere in the world." German growth slowed in August, though economists say it often does - and it still looks robust. So the real surprise was the UK: its manufacturing orders rose to their highest in two years. A fall in the value of sterling helping cushion the impact of Brexit - at least in the UK. SOUNDBITE (English) CHIEF ECONOMIST, WORLD FIRST, JEREMY COOK, SAYING: "If there's a Brexit impact later on down the line it's likely to first manifest itself in the political scenarios we see play out in the euro zone over the course of the next year or so, be that the Italian elections, the Dutch, the French or the German elections in the late part of next year. And that will start to see a fall-off in investment spending, that may see a fall-off in consumer confidence and capital expenditure of businesses." And euro zone new order growth for manufacturing was at its weakest since early 2015. That - coupled with still muted demand across the euro zone - seen keeping further ECB policy easing on the menu for some time to come.