Eurozone business activity picks up

Eurozone business activity picked up strongly in October to a 10-month high, recovering from a dip in September, as economic powerhouse Germany led the way, a closely watched survey showed Monday.

Data monitoring company IHS Markit said the October figures were encouraging, after months where the economy has bumped along the bottom and was then badly rattled by Britain's shock vote to quit the European Union in June.

It said its preliminary October Composite Purchasing Managers Index (PMI) for the 19-nation eurozone jumped to 53.7 points from 52.6 in September.

The PMI measures companies' readiness to spend on their business and so gives a good idea of how the underlying economy is performing.

Any reading above the boom-bust 50 points line indicates the economy is expanding.

By sector, the PMI for services rose to 53.5 points from 52.2 in September while manufacturing hit 53.3 points after 52.6.

IHS Markit said a strong performance in Germany helped offset continued softness in France, the second largest eurozone economy.

"The eurozone economy showed renewed signs of life at the start of the fourth quarter, enjoying its strongest expansion so far this year with the promise of more to come," IHS Markit chief business economist Chris Williamson said in a statement.

"With backlogs of work accumulating at the fastest rate for over five years, business activity growth and hiring look set to accelerate further as we head towards the end of the year," Williamson said.

He said the figures were consistent with growth of 0.4 percent in the last three months of 2016, with Germany now expected to gain 0.5 percent.

While France will be slower at an estimated 0.2-0.3 percent, "there are various indicators which suggest that France will enjoy stronger growth in coming months," he said.

In all, "policymakers will be encouraged by signs of both stronger economic growth and rising price pressures," which could see the European Central Bank ease back on its massive economic stimulus programme.

The eurozone economy grew 0.3 percent in the three months to June, down sharply from 0.6 percent in the first quarter.

Third-quarter data is expected next week and most analysts believe it will be in line with the second quarter's 0.3 percent.