Euro area: PMIs signal resilient growth – Nomura
Nomura’s European Economics team notes that Euro area August Purchasing Managers' Index (PMI) showed resilient growth, led by a strong manufacturing rebound, while price pressures eased.
Euro area Purchasing Managers Index (PMI) data published on August 2 reveals resilient growth, with manufacturing leading the rebound and price pressures easing. The manufacturing PMI rose to its highest level since February 2022, propelled by strength in Germany and France, while the services PMI remained unchanged despite declines in those two countries, indicating strength from the periphery.
Euro area consumer inflation expectations remained contained, supporting the view that the European Central Bank (ECB) could hike rates by 25 basis points in September. The ECB's Consumer Expectations Survey showed that 3-year ahead median inflation expectations declined by 0.1 percentage points to 2.7%, while 5-year ahead expectations remained unchanged at 2.4%.
Despite the Iran war's re-escalation, euro area PMI price indices showed no signs of building business price pressures. The next ECB and Bank of England meetings are in September, with expectations of a 25bp rate hike from the ECB and no change from the BoE.
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