Euro zone business growth hits fastest this year; inflation up

Euro zone business activity grew at its quickest pace this year in November and firms, which benefited from a weaker euro, raised prices faster than at any time in five years, a survey found on Monday.

Policymakers at the European Central Bank this week are expected to announce a six-month extension to their asset purchase programme to try to boost inflation, further denting the currency and offering support to exporters.

IHS Markit's final composite Purchasing Managers' Index for the euro zone was 53.9 in November, below a 54.1 flash estimate but beating October's 53.3 and its highest since December. The index has been above the 50 mark that divides growth from contraction since mid-2013. "The composite PMI was revised down slightly but it's still consistent with a pickup in euro zone GDP growth which is quite positive," said Stephen Brown at Capital Economics.

Adding to the more upbeat picture, retail sales rose more than expected in October, official data showed earlier. The PMI for the dominant services industry jumped to 53.8 from 52.8, below the flash 54.1 but its highest level this year. Manufacturers enjoyed their best month since the start of 2014 in November, a sister survey showed last week.