Strong Eurozone Composite PMI and Accelerating Inflation Bolster Case for ECB Rate Hike

[Strong Eurozone Composite PMI and Accelerating Inflation Bolster Case for ECB Rate Hike]

(1) The Eurozone composite PMI survey shows the economy remains resilient despite rising commodity prices and accelerating inflation.

(2) These dual factors strengthen the case for another rate hike by the European Central Bank. The ECB is expected to deliver its final hike of the current policy tightening cycle in December.

(3) Across member states, economic conditions are broadly positive. Germany's composite PMI rose from 51.8 to 53.8, while France's PMI increased from 48.5 to 51.2.

(4) However, France's sub-indicators were weaker: both employment and new export orders fell below the 50 threshold separating expansion from contraction, while the new orders index was only slightly above the boom-bust line.

(5) Germany's corresponding indicators all remained firmly above this threshold.