Euro zone businesses started the second half of 2017 with solid growth, though declining inflation pressures could put paid to expectations of a stimulus clawback by the ECB later this year, a survey found on Monday.
Years of ultra-easy policy may be bolstering growth, but inflation is still nowhere near the European Central Bank’s 2 percent target ceiling and shallower price rises this month will provide disappointing reading for policymakers.
IHS Markit’s euro zone Flash Composite Purchasing Managers’ Index for July, seen as a good guide to economic growth, fell to 55.8 from June’s 56.3, still comfortably above the 50 level that separates growth from contraction.
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Craig Erlam
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