The euro-area economy strengthened further at the start of 2018, bringing with it signs of a long-awaited pickup in inflation.The improvement lifted IHS Markit’s Purchasing Managers’ Index to 58.6 from 58.1 in December, higher than economists had forecast. The gauge is now at a level suggesting quarterly economic growth of close to 1 percent, according to the report.
Rising output prices will reinforce the position of the more hawkish members of the European Central Bank’s Governing Council. They’ve already been out in force this year, arguing that the improved economic backdrop has put inflation on a path toward 2 percent and justifies an unwinding of unprecedented stimulus.
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