Official figures show that economic confidence in the euro zone rose in March to a six-year high while unemployment hit a record low in February. The data cemented expectations that the ECB will keep raising interest rates.
The European Commission's euro zone economic sentiment indicator rose to 111.2 points in March, well above forecasts for 110. The result was the highest level of confidence in the euro zone economy since January 2001 and comes despite an increase in German VAT at the beginning of the year, a slowing US economy, a strong euro and financial market turbulence.
With confidence soaring, companies have been stepping up hiring, pushing the the unemployment rate in the euro zone to a record 7.3% in February, the lowest level on the books at the EU's Eurostat agency.
Since peaking at 8.9% during an extended period ending in September 2004, unemployment has steadily declined as the economy gathers pace.
Despite the firm economic growth, inflation has remained tame, with a first estimate released today from Eurostat showing that the annual rate crept up to 1.9% in March from 1.8% in February.
The estimate was in line with the European Central Bank's preference for an annual inflation rate of less than but close to 2%. Euro zone inflation has held largely steady since the beginning of the year.
