Eurozone economic confidence matched its highest level in more than four years as the European Central Bank prepares to make a decision on whether to increase stimulus.
An index of executive and consumer confidence stood at 106.1 in November, the European Commission in Brussels, and October’s reading was revised to the same level from an initial 105.9. The figures are the strongest since May 2011. Economists in a Bloomberg survey predicted the gauge would stay unchanged at 105.9.
With a slowdown in emerging markets and persistently low inflation testing the strength of the currency bloc’s recovery, the ECB is debating whether to provide a new round of easing. Options include propping up its €1.1 trillion ($1.2 trillion) asset-purchase program and cutting the deposit rate further below zero. The Governing Council will make a decision on Dec. 3.
“The ECB has already made up its mind, and Draghi will deliver next week,” said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. “You’d have to see spectacular change to sway the ECB from taking action at this point given that its main inflation is not rising quickly enough.”
Ahead of next week’s meeting, Kounis expects Draghi to be “quite aggressive” in his delivery, announcing a package of measures including a rate cut, an open-ended extension of QE upping the amount of monthly purchases and strong forward guidance.
