Cheer in the eurozone as economic morale picked up

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Economic morale in the eurozone improved for the first time in almost a year in November, but industry’s reluctance to invest next year bodes poorly for a quick recovery from recession.

Sentiment towards the bloc’s economy rose 1.4 points to 85.7 beating forecasts and ending an eight-month run of falls, the European Commission’s monthly business and consumer survey showed yesterday, with Germany and France gaining strongly.

The Commission’s survey of industry found expectations of a 1 per cent fall in real investment in 2013 compared to this year, however, casting doubt on European policymakers’ predictions that growth will return next year.

“The economic outlook for the eurozone remains pretty dreadful,” said Jonathan Loynes, chief European economist at Capital Economics in London. The eurozone fell into a recession in July-September, its second since 2009, as French resilience failed to make up for a slump across Europe and the three-year-old debt crisis dragged on Germany, Europe’s economic engine. The Commission sees 0.1 per cent growth in the eurozone economy next year.