Economists: Accelerated growth in eurozone services fuels expectations of interest rate hikes.

October 5th, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said: "The eurozone service sector growth rate hit its fastest level since last November, indicating that the eurozone economic recovery is accelerating, and the growth momentum is spreading from manufacturing to broader areas.

The composite signal from the PMI survey shows that the eurozone economy is currently expanding at a quarterly growth rate of 0.4%, and is expected to achieve further growth in the fourth quarter. Service sector activity in Germany and France both showed signs of growth for the first time since March, with Germany and France achieving their first service sector expansion this year; Italy achieved expansion for the fourth consecutive month, performing better than Spain, which also saw its strongest growth in four months. Overall growth in September hit the fastest level in five years.

At the same time, the survey shows that input price inflation rose to 4%, indicating that the eurozone inflation rate is approaching the upper limit of the European Central Bank's 2% target. Combined with the accelerated economic growth shown by the PMI, these data indicate that pressure on the European Central Bank to take further more aggressive monetary policy tightening measures is increasing."