Eurozone Defies Energy Shock with Strongest Growth in Three Years

The Eurozone business activity expanded at its fastest pace in more than three years in September, defying expectations that higher energy costs would quickly weaken growth.

The composite PMI rose to 53.1 from 52.0 in August, the strongest reading since April 2023 and above forecasts of 51.7 or 52.6.

The improvement was broad-based across sectors and countries, with both manufacturing and services expanding, new orders increasing at their fastest rate in over four years, and companies hiring more staff in response to stronger demand.

The strong growth data complicates the European Central Bank's (ECB) monetary policy decisions as inflation remains above target while the economy appears resilient enough to absorb further interest-rate increases.