Eurozone industrial production grows strongly

Measures like the car scrappage scheme have boosted industrial growth

Industrial production in the 16 countries that use the euro increased by much more than expected in January.

The 1.7% growth between December and January was the largest monthly jump since Eurostat started producing the data in 1990.

The increase fuels hopes that the eurozone economy's recovery from recession is gathering pace.

Production of durable consumer goods, which includes items like cars, furniture and appliances, rose by 2%.

Factory output in January 2010 compared with January 2009 was 1.4% higher, which is the first year-on-year gain since April 2008.

December's industrial performance was also revised up substantially to show a gain of 0.6% from November rather than a drop of 1.7%.

The eurozone economy grew by 0.1% in the last three months of 2010, but some economists hope this figure will be revised up.

The European Commission's latest forecast suggests the eurozone economy will expand by 0.7% during 2010 after contracting by 4% in 2009.

"Given that the business surveys point to a further improvement in the industrial sector in the near term, a sharper quarterly rise [in economic growth] is certainly possible" said Ben May from Capital Economics.

"While all this is pretty encouraging, the euro's strength and the likely slowdown in the global recovery will weigh on the [industrial] sector later in the year."