On the UK it says it has "exceeded expectations" and the outlook now is "quite bright." The EC is forecasting growth in UK of 1.3pc (slightly lower that Niesr's estimate yesterday of 1.4pc) in 2013. Growth is forecast at 2.2pc in 2014 and 2.4pc in 2015. One of the main risks to forecasts is wage growth, the EC says: The main risks to the forecast stem from an extension of weak real wage growth, investment being further postponed and the expected upturn in net exports failing to transpire. Eurozone economy turns corner, but growth, inflation subdued 10.02 Aside from the UK services PMI, the European Commission has just released its latest economic forecasts. It says the economy of the 18 countries that will share the euro from next year will expand 1.1pc in 2014 after a 0.4pc contraction this year. In 2015, the eurozone is to accelerate to growth of 1.7pc. Next year's forecast is down on May's estimate of 1.2pc growth, but the EC was more optimistic on private consumption and investment. EU Economic and Monetary Affairs Commissioner Olli Rehn said in a statement said: There are increasing signs that the European economy has reached a turning point. The fiscal consolidation and structural reforms undertaken in Europe have created the basis for recovery. Services supports third quarter growth of 1.3pc 09.41 With business activity across the UK private sector economy hitting an all-time high of 61.5 in October, up from 60.2 in September, Chris Williamson, chief economist at survey compilers Markit, said it pointed towards growth of 1.3pc in the third quarter. Historical comparisons of the PMI against gross domestic product suggest the latest survey data are consistent with a 1.3% quarterly rate of GDP growth, up sharply from previous quarters. The surveys also indicate that the rate of private sector job creation is currently running in excess of 100,000 per quarter. Manufacturing, services and construction all continued to see very strong rates of expansion, pointing to an ongoing broad-based upturn. However, it is the services sector which - due to its sheer size - is the major driving force behind economic growth at the moment. So could it lead to the Bank of England bringing forward its guidance of when the unemployment rate will slip to 7pc? Williamson thinks it could. The buoyant survey data are likely to encourage the Bank of England to raise its forecasts for economic growth when it publishes its new projections in November. The Bank is also likely to bring forward its expectation of when unemployment will fall below 7%, the threshold needed to be reached before the Bank will consider raising interest rates. Fastest rise in business activity since 1997 09.36 The rise in UK services has been driven by a rise in business activity, which expanded at the fastest pace since May 1997. Backlogs also increased at a sharp pace, which drove companies to hire, with growth in employment in the sector the best seen in nearly 16 and a half years. UK services grows at fastest pace in 16 years 09.30 Some great news for the UK services data this morning - PMI stormed up to 62.5 - higher than the 60 that had been expected. Markets slip into the red 09.24 European markets have slipped, reversing gains made in early trading. In London the FTSE 100 is now down 0.1pc, the Dax is down 0.13pc, the Cac is down 0.16pc, the Ibex is down 0.36pc and the FTSE Mib is down 0.24pc. Markets had nudged higher after comments from US Fed member James Bullard hinted that the central bank was in no rush to taper. But markets have slipped after mixed results from blue chips and uncertainty in the run-up to an ECB policy meeting which kept investor enthusiasm for equities in check. MPs to grill payday loan firms 09.14 MPs will grill payday loan companies today as part of a Government crackdown on the short-term lending sector. Representatives from Wonga, QuickQuid and Mr Lender - three of the biggest payday lending firms - will appear before the Business, Innovation and Skills Select Committee. MPs are expected to follow up on a damning report by the Office of Fair Trading that found "deep-rooted" problems in the way payday loans attract and treat customers. Last night Wonga's chief operating officer, Niall Wass, told Newsnight it had one million UK customers, of whom 99pc were content with the company's lending terms. Mr Wass added that Wonga was careful about who it lends to. He said his customers' views were not being properly represented by the media and others. The perception is that Wonga customers are poor and vulnerable but there are a silent majority of customers out there who are not. Payday lenders to be grilled by MPs RSA biggest faller on FTSE 08.59 The biggest faller in the FTSE 100 is RSA Insurance, which has said this morning that its return on equity this year will be hit in part by the St Jude's Day storm last month. 2013 is proving to be an exceptionally tough year for weather events for the group. Over the summer we saw the worst and the third worst natural catastrophe insurance events on record in Canada, followed by continued adverse weather across the country during the third quarter. More recently, Northern Europe suffered a severe windstorm on 27 and 28 October. Our priority has been to provide the support our customers need to get back on track as quickly as possible. Assuming no further major weather events in 2013, we now expect the impact of adverse weather across the group to be around 1.5pc points above our planning assumption. We now anticipate 2013 return on equity to be below 10pc. That has sent its shares down 5.3pc. Italy's finance minister urges ECB to ease policy 08.51 Italy's finance minister has urged the European Central Bank to ease monetary policy, questioning the effectiveness of the bank's strategy of verbal intervention to cap the strong euro. The Financial Times reports that Fabrizio Saccomanni said: The euro is now the strongest currency in the world vis-a-vis the dollar, the renminbi, the pound, the Swiss franc. That must reflect the perception of the monetary stance in Europe vis-a-vis what other countries are doing now and in the foreseeable future. If I understand markets they want to see some concrete (policy) action at some point and maybe before the end of the year. Saccomanni, a former director general at the Bank of Italy, said the ECB's assurances that interest rates would stay low until the economy picked up "does not seem to be working as well as one hoped." Italy's finance minister Fabrizio Saccomanni M&S shares rise 08.34 Investors have responded positively to Marks & Spencer's latest numbers and have sent shares in the high-street stalwart up 3.1pc, the biggest riser in the FTSE 100. Troika in Greece 08.28 The troika are returning to Athens today to check how far the country has come in meeting its bailout commitments, including privatisations. Doubts had emerged over whether the lenders would return this week as scheduled after differences emerged over how to plug a gap in Greece's 2014 budget, but the two sides settled their differences. The lenders fear that without new measures, Greece will miss a targeted primary budget surplus, excluding debt servicing outlays, next year. Corporate round-up 08.12 A bit of corporate news around this morning. Louise Armitstead has the details in her city briefing morning email. Associated British Foods, the owner of Primark, has reported a 9pc growth in annual revenues. Pre-tax profits have jumped to £876m from £761m last year. George Watson, chief executive, has declared a "great set of results" and a "remarkable year for Primark." G4S, which is the subject of a Serious Fraud Office investigation as of yesterday, has reported a 6.4pc growth in revenues over nine months - excluding the botched Olympics contract. But investors are more interested in the strategy update expected today. It will be Ashley Almanza's moment to layout the shape of the company going forward. All change at Imperial Tobacco today: the company has said its chairman Iain Napier will step down at the annual meeting in February and be succeeded by Mark Williamson, deputy chairman. Two other directors Berge Setrakian and Susan Murray, are stepping down too. The tobacco company has reported a 1pc rise in full year operating profits to £3.2bn. Investors will quiz Alison Cooper, chief executive, on the progress of its electronic cigarettes division, Fontem Ventures. Flybe has announced its chairman Jim French will be replaced by Simon Laffin, currently a director of Quintain and the former finance director at Safeway. It's the end of era: French joined the company in 1990, was made chief executive in 2001 and chairman in 2005. Primark's annual operating profits have just topped half a billion, up 44pc. Like for like sales growth of 5pc European markets edge higher 08.01 As expected European markets have nudged higher on open supported by those comments from US Fed member James Bullard (see 07.39). The FTSE 100 is up 0.1pc In Germany the Dax is up 0.2pc In France the Cac is up 0.2pc In Spain the Ibex is up 0.3pc In Italy the FTSE Mib is up 0.3pc M&S sales 'gradually improving' 07.53 Marc Bolland, M&S chief executive, has just been on Radio Four's Today Programme to discuss this morning's half year results, which showed that like-for-like clothing sales fell for the ninth straight quarter. He tells John Humphries that sales are "gradually improving" and he has seen "early signs of good pick up for [the autumn/winter] collections." He will not be drawn on whether M&S clothing is "cheap, cool or sensible" saying these categories are "not the right ones." What we're aiming for is more stylish against strong value with good quality. Humphries also asks Bolland why M&S is selling a £199 onesie. It will be for those who want to treat their ladies this christmas Marc Bolland China services PMI at highest level this year 07.46 A fairly positive China HSBC October services PMI report which would appear to confirm the positive reading from the official government figure at the weekend, reinforcing the belief that the move towards rebalancing the Chinese economy appears to be proceeding as planned. The official non-manufacturing PMI rose to 56.3 in October from 55.4 in September. That was the highest level this year and followed faster-than-estimated growth in two manufacturing indexes last week. Fed in no rush to start taper 07.39 European markets are set to edge higher when they open after yesterday's rather dovish comments from FOMC member James Bullard who appeared to be in no rush to raise market expectations of an imminent Fed taper. Contrasting that with his comments after the September FOMC meeting when he said a taper was a close call, the contrast could not be more marked. Michael Hewson, chief market strategist at CMC Markets, notes: His comments on inflation suggest that the Fed would be in no rush to pull back from its current stimulus path. This may change next year when both Plosser and Fisher, both more hawkish, become voting members, but for now investors are erring towards caution ahead of this week's October payrolls report. Marks & Spencer sales fall again despite 'Leading Ladies' campaign 07.27 Marks & Spencer has reported another fall in clothing sales as the company's high profile "Leading Ladies" campaign failed to transform the high street retailer's fortunes, reports our retail correspondent Graham Ruddick. The 129-year-old clothing and food retailer said on Tuesday morning that like-for-like general merchandise sales, which includes clothing and homewares, dropped 1.3pc in the second quarter of its financial year from July to the end of September. The company relaunched its womenswear clothing range for the autumn and winter season after two years of sales declines. The collection, which saw sleeves introduced to most dresses because of customer feedback, was backed by a glitzy advertising campaign starring Dame Helen Mirren. Marc Bolland, chief executive of Marks & Spencer, said the collection has been "well received" by customers and there has been "early signs of improvement." Helena Bonham Carter in the new Marks & Spencer Christmas advert, in which she plays a wizard House price rises to fuel UK growth next year 07.19 House price rises will help to cement Britain's recovery next year, the National Institute of Economic and Social Research (NIESR) has said, though a rise in consumer spending will come at the expense of a fall in household savings rates. Szu Ping Chan reports that NIESR upgraded its UK growth forecasts for 2013 and 2014, and said house price rises would drive an increase in consumer spending. NIESR expects the UK economy to grow by 1.4pc in 2013, double its February forecast of 0.7pc. It said spending would be boosted by purchases of big ticket items such as fridges, freezers and furniture. It also revised up its 2014 growth projection to 2pc, compared with 1.5pc in February. The think-tank now expects UK house prices to rise by 5pc next year, from an earlier forecast of just 0.5pc. It also said the increase would add about half a percentage point to consumer spending growth - which drives almost two-thirds of the British economy. The stronger rate of growth would also see UK output return to its pre-crisis peak in early 2015, NIESR said on Tuesday. Gross domestic product in the third quarter was estimated to be 2.5pc below the peak in the first quarter of 2008, according to the Office for National Statistics. The think-tank now expects UK house prices to rise by 5pc next year 07.12 SAC Capital, the hedge fund run by Steven Cohen, pleaded guilty to insider trading and agreed to pay $1.8bn in fines in one of the biggest criminal cases against a hedge fund, but a cloud remains over the trading impresario as investigators continue to probe his trades, people familiar with the matter said. reports the Financial Times (£). The Times (£) reports that the boss of British Gas said that he would forgo his bonuses of up to £3.5 million this year in a move that will put pressure on other utility bosses to make similar sacrifices. The Guardian reports that the Co-operative Group was scrambling late on Monday to convince the 4.6 million customers of its banking arm that its ethical stance could survive aggressive US hedge funds taking a stake in the troubled bank. 07.05 Leading our finance page this morning is the news that shares in BlackBerry collapsed to their lowest level in a decade after the smartphone maker abandoned hopes of finding a buyer and drew up a radical new investment scheme instead, writes Katherine Rushton. Elsewhere, new figures last night revealed that a record 18.3 per cent of non-food purchases were made online - via computers, tablets or mobile smartphones - in October, with more than 30 per cent of all footwear being bought over the web, Steve Hawkes reports. Finally, the jobs market is enjoying robust growth with the number of vacancies at a five-year high and growth in every region and sector, according to new data from recruitment group Reed, writes Alan Tovey. 07.00 Good morning and welcome to our daily business and markets live blog, your one stop shop for all the breaking business stories of the day.