LONDON - European business activity struck a six-year high in June, a survey has shown, but price rises could prompt faster interest rate increases in the euro zone although economic growth there may be peaking.
Growth in the euro zone services sector reached its highest since June of 2000, a boom year, according to the survey by NTC Research which also reported that firms raised prices faster than at any time since November 2000.
The RBS/NTC survey's headline activity index rose to 60.7 in June from 58.7 in May, well above the 50 divide between growth and contraction and beating the consensus forecast of 59.0.
That, coupled with a sister survey on Monday which showed a similar peak in the manufacturing industry, encouraged further speculation about the speed at which the European Central Bank will raise credit costs to tame inflation.
Some added spark may have come from the soccer World Cup, which began in June and ends in Berlin on Sunday.
The ECB meets on Thursday but most people are still betting on an August rate rise, which would be the fourth since the ECB began hiking in December from a historic low of 2.0 per cent.
However, some feel it might come on August 3 while others expect a move at the ECB's second policy meeting of the month on August 31.
- REUTERS
European businesses hit high, poll shows
AdvertisementAdvertise with NZME.