Eurozone business activity hits 29-month high amid inflation surge

Eurozone business activity reached its strongest expansion in 29 months during September, propelled by robust service sector demand and increased artificial intelligence investments. The uptick signals economic resilience across the 20-nation currency bloc.

However, inflation accelerated to 3.8% amid climbing energy costs, a development that complicates the economic outlook. Market expectations now lean toward the European Central Bank maintaining elevated interest rates or implementing further hikes by mid-2024, potentially restraining growth momentum.