By Francesco Guarascio
BRUSSELS (Reuters) - Euro zone economic sentiment rose by more than expected in October and hit its highest level since the start of 2001, after the dot-com bubble had burst, data from the European Commission showed on Monday.
The near 17-year high confirms the solid economic recovery of the 19-country currency bloc after a decade-long economic and financial crisis.
The European Commission's monthly survey showed that sentiment in the euro zone rose to 114.0 in October from an upwardly revised 113.1 in September. Economists polled by Reuters had expected a more modest rise to 113.4.
It was the highest reading since January 2001, when the burst of the dot-com bubble had begun to hit confidence in the euro zone. The index peaked at 119.0 points, its highest ever level, in May 2000.
The Commission's overall business climate index, a separate indicator which points to the phase of the business cycle, also rose to 1.44 in October from 1.34 in September -- its highest reading since March 2011 when it was at 1.47.
Optimism grew in all surveyed economic sectors, jumping to 16.2 points from 15.4 in September in services, the largest sector in the euro zone.
Confidence in industry grew to 7.9 from 6.7 and the retail sector saw a rise of sentiment to 5.5 from 3.0.
Consumers shared the positive mood, with optimism rising to -1.0 from -1.2 in September, reaching the highest level in 16 years, data released on Monday showed, confirming a preliminary estimate published last week.
The euro zone's improving sentiment did not extend to Britain where confidence among consumers dropped to -5.5 from -5.2 in September.
The positive reading for the 19-countries bloc sharing the euro was only partly clouded by a drop in inflation expectations among manufacturers to 8.6 from 10.5 in September. That could limit corporate earnings and potentially curb output.
Manufacturing production expectations dipped slightly, while export order books rose only marginally.
Inflation expectations among consumers continued instead to increase, to 14.7 from 14.2 in September.
(The story was refiled as the Commission corrects when sentiment was at highest level since)