Business activity across Europe expanded at its fastest rate in nine months during February, raising expectations that the continent can avoid an economic recession.
The better-than-expected performance was driven by services, which saw their strongest growth since June of last year. Manufacturing output throughout Europe has also improved as supply-chain bottlenecks continue to ease.
In all, business activity rose across the region in February, with both France and Germany returning to expansion mode after pullbacks seen in January.
Business confidence in Europe has also improved as shortages of natural gas became increasingly unlikely this winter, and as the worst inflation in decades started to decline from a double-digit peak seen last fall.
The strong business activity will likely embolden the European Central Bank (ECB) to continue raising interest rates in the coming months.
The ECB hiked rates by 50-basis points earlier in February and telegraphed an identical increase for March of this year.
