Eurozone sentiment extends recovery in August

• The final consumer confidence reading for August was -15.5, matching the preliminary figure.
• That compares with a prior reading of -15.9.
• Economic confidence in August came in at 98.4, above the expected 97.5.
• The prior figure was 96.9, later revised upward to 97.1.
• Industrial confidence for August registered -5.3, slightly below the -5.2 forecast.
• This marks an improvement from the prior -6.1.
• Services confidence in August was 5.8, beating the expected 4.9.
• The prior figure was 4.7, revised up to 5.1.

Euro area economic sentiment kept improving late in the summer, supported by stronger confidence in both manufacturing and services. That provides at least some good news, even though it remains a difficult period for the region's large economies, particularly as they battle inflation.

In that regard, the latest price data from the survey sends a warning signal. Consumer inflation expectations rose to 33.0 from 30.4 previously. It is the first increase in the indicator since April.

On a brighter note, selling price expectations continued to decline, dropping to 16.4 from 17.8 earlier.

The ECB is widely anticipated to raise key interest rates again in September. The central bank must prepare for possibly even tighter policy if inflation pressures prove more persistent heading into year-end.

Additionally, the prolonged US-Iran conflict is raising the likelihood of such a scenario daily.