Eurozone edging towards economic recovery

It rose to 50.4, up from 48.7 in June, driven by increased output from private sector companies in France and Germany. It is the first time that the index has cleared 50, which marks the tipping point between recession and growth, since January 2012.

Manufacturing data was particularly encouraging.

Data from Germany, the bloc's largest economy, indicated that the country's traditionally strong manufacturing sector rose to 52.8 from June's 50.4, the strongest reading since February this year.

Meanwhile, France's manufacturing sector also came close to posting growth, with a PMI of 49.8 (up from 48.4 in June), itself a 17-month high. The news has prompted the Bank of France to project that the country's economy grew by 0.2 percent in the second quarter of 2013, potentially bringing an end to its recession.

However, unemployment in France hit a record high in June, according to statistics also published on Wednesday.

The country's jobless total rose by 0.5 per cent to 3.279 million, an increase of 14,900 people from May, in news that deals a blow to President Francois Hollande's pledge to reduce unemployment by the year's end.

Hollande is coming under increasing pressure from Brussels to bring down France's budget deficit and shake up its labour market and from his governing socialist party to increase employment.

But unemployment tends to be a lagging economic indicator. Increases in business confidence and output are unlikely to be reflected in improved labour market figures for between three and six months.