SURPRISINGLY strong growth in France supported stable eurozone private business activity during August but factories could face a tougher September as new order growth stumbled, surveys showed yesterday.

    Muddying the outlook for the coming months is the United Kingdom’s vote in late June to leave the European Union, although so far the economic repercussions seem to have been confined to Britain, not its main trading partner.

    “August’s slight rise in the eurozone Composite Purchasing Managers’ Index (PMI) suggests that, despite shrugging off the U.K.’s Brexit vote, economic conditions remain fairly subdued,” said Stephen Brown at Capital Economics.

    France’s private sector shrugged off the U.K.’s vote and accelerated to levels last seen just before the militant attacks in Paris in November, as an upturn in the service sector offset continued weakness in manufacturing.

    Those attacks, and the recent one in Nice in July, hit the country’s service industry — the hotel and restaurant sector in particular — and resulted in lower demand for travel to Europe.

    In France, the travel and tourism sector’s contribution to GDP will grow 1.1 percent this year, down from a previous forecast of 2.9 percent, the World Travel and Tourism Council said Monday.

    Still, the brighter overall picture should alleviate fears the French economy continued to slow down this quarter after unexpectedly stagnating in the second quarter of the year.

    German private sector growth slowed in August, but remained robust overall, its PMI showed, suggesting Europe’s biggest economy is set to keep on expanding in the summer months after it grew more than expected in the second quarter.

    Consumer confidence fell markedly again across the currency bloc in August, a sign of low morale after the British decision to leave the EU, official data showed yesterday.

    The European Commission’s flash estimate, which defied economists’ forecasts of a rebound in confidence this month, showed eurozone consumer morale decreased to -8.5 in August from an unrevised -7.9 in July.

    Markit’s flash composite Purchasing Managers’ Index for the eurozone edged up to a seven-month high of 53.3 from July’s 53.2, where any reading above 50 indicates growth.

    Markit said the PMI pointed to GDP expanding 0.3 percent this quarter, matching a Reuters poll earlier this month that showed the eurozone economic outlook stable but lackluster, about half the speed at the start of the year.

    “With underlying growth remaining muted, the European Central Bank looks set to ease monetary policy further by year-end. After all, we do not expect inflation to increase by then either,” economists at Commerzbank told clients.

    Pressure remains on the European Central Bank to announce more easing as it has so far been unsuccessful in getting inflation anywhere close to its 2 percent target ceiling.

    It is currently at just 0.2 percent year on year.

    But there is little confidence amongst economists about just how much firepower the European Central Bank has left.

    Of some concern, having only trimmed their prices in July, firms returned to deeper discounting this month. The eurozone output price index fell to 49.5 from 49.8. (SD-Agencies)