Euro zone Nov business growth fastest this year, price pressures rising - PMI

By Jonathan Cable

LONDON (Reuters) - Euro zone business activity grew at its quickest pace this year in November and firms raised prices faster than at any time in five years, a survey of the

bloc's businesses found on Monday.

Firms also benefited from a weaker euro and policymakers at the European Central Bank are this week expected to announce a six-month extension to their asset purchase programme to try to boost inflation, further denting the currency and offering support to exporters.

Markit's final composite Purchasing Managers' Index for the euro zone was 53.9 in November, below a 54.1 flash estimate but beating October's 53.3 and its highest since December. The reading has been above the 50 mark that divides growth from contraction since mid-2013.

"The weaker euro appears to be feeding through to faster export-led manufacturing growth, though service sector companies are also enjoying stronger expansion, suggesting that domestic demand is also improving," said Chris Williamson, chief business economist at IHS Markit.

An index covering the bloc's dominant services industry jumped to 53.8 from 52.8, below the flash 54.1 but its highest level this year. Manufacturers enjoyed their best month since the start of 2014 in November, a sister survey showed last week.

With activity picking up, the PMI points to fourth quarter economic growth of 0.4 percent, Williamson said, matching the prediction in a Reuters poll on Friday.

Suggesting the acceleration may continue through to the end of the year, new orders jumped. The sub-index for the service industry climbed to a 10-month high of 53.5 from 52.6.

Years of ultra-loose monetary policy have so far failed to get inflation anywhere near the ECB's close-to-2-percent target but pressures are mounting slowly. The composite output price index rose to 50.6 from 50.0, its highest since August 2011.

"The signs of steady fourth quarter growth and indications that inflationary pressures are rising will be unlikely to deter the ECB from extending its QE programme at its December meeting," Williamson said.

- Detailed PMI data are only available under licence from

Markit and customers need to apply to Markit for a licence.

(Editing by Toby Chopra)