The European Central Bank kept rates unchanged at 2% for the third successive meeting, signaling policy remains in a 'good place' as inflation nears target and growth strengthens.

New business volumes expanded at the steepest pace in about two-and-a-half years, driven entirely by services while manufacturing orders stagnated, with the composite new orders index rising to 52.1 from 50.6.

The PMI increase to 52.5 in October signaled ten consecutive months of expansion and the strongest reading in nearly three years.

Spain led the bloc with a 56.0 composite PMI (its best in 10 months), while Germany reached 53.9 (its highest in nearly two-and-a-half years); Italy and Ireland also grew, at 53.1 and 53.7 respectively, whereas France stayed in contraction at 47.7.

Employment rose to a 16-month high as service firms hired to meet demand, while manufacturing jobs continued to decline.

The eurozone economy expanded at the fastest pace since May 2023 in October, led by a robust services sector and improved demand, as the HCOB/ S&P Global Composite PMI rose to 52.5, marking 10 straight months of growth and the highest level in 29 months.

Service activity climbed to a 17-month high, with a October reading of 53.0, up from 51.3 in September.

France remained in contraction territory, with an index of 47.7, its eight-month low and a brake on overall eurozone growth.

Prices showed divergence: input cost inflation cooled to a three-month low while selling prices rose at the strongest rate in seven months.

Inflation dynamics reflected cooler input costs and steeper selling prices, with overall input costs easing to a three-month low and selling prices advancing at their quickest pace in seven months.