Euro zone business activity in August was at its strongest level since June 2011, figures released on Wednesday showed, offering hope that the region is on its way to a sustainable recovery.
Markit's Eurozone Composite Purchasing Managers Index (PMI) will add to the case for the European Central Bank (ECB) to leave interest rates on hold when it meets on Thursday.
The figure came in at 51.5 for August, up from 50.5 in July.
Sony Kapoor, managing director at international think tank Re-Define, warned however that the figures were hardly outstanding.
"It was hard to sink lower than we were so it's got to be put in perspective that we're starting from a bad base -- and there's reason to question how solid the base of this recovery is," he told CNBC.
(Read more: Eurozone manufacturing picks up in August)
"The global economy is not exactly in a very robust shape, particularly in the uncertainly surrounding the shape of emerging markets," he said, warning that the outlook for European banks remained very difficult looking ahead.
The chief U.K. and European economist at IHS Global Insight said although the figures could help boost business and consumer confidence, the upside for domestic demand in the euro zone was likely to remain constrained by a number of factors.
(Read more: Global economic uptick boosts stocks, euro)
"[There is] still widespread restrictive fiscal policy, persistently tight credit conditions in many countries, elevated unemployment, and limited consumer purchasing power...This is particularly true of the southern periphery euro zone countries," Howard Archer said. "Meanwhile, global growth is still relatively muted, which threatens to limit the upside for euro zone exports."
