The eurozone's battered economy is showing signs of recovery. The latest surveys of thousands of the region's companies reveal business activity grew strongly in January and optimism was at an eight-month high with services firms particularly upbeat. The employment picture was less encouraging. Companies reduced the number of people in their workforces again last month and did it at the fastest pace in over three years. There was also a worrying divergence between the two biggest economies. Eurozone powerhouse Germany enjoyed big gains, while the reading for its neighbour - France - plummeted to its lowest in nearly four years. That's a really worrying sign. It's going to cause more tensions between Germany and France... on various aspects of eurozone management," said Jennifer McKeown, an economist at consultancy Capital Economics. France will continue to call for more supportive policy, not just for the periphery but the euro zone as a whole. Germany is taking a much more hardline stance. Across the channel in Britain, activity amongst the country's services firms, which account for more than three-quarters of gross domestic product, rose. "The UK services PMI has bounced back into growth territory, dampening fears over an unprecedented triple-dip recession being called," said James Knightley at ING. After only one quarter of expansion, Britain's economy contracted again at the end of last year. That put it on the brink of its third recession in four years. More about: Economy, Eurozone, Recession