Economic sentiment in Europe improved sharply in January, with the Economic Sentiment Indicator rising 1.9 points to 99.2 in the EU and 2.2 points to 99.4 in the Eurozone. The readings mark the closest approach to the long-term average of 100 since mid-2022, signaling a meaningful improvement in confidence at the start of 2026. Employment Expectations Indicator climbed to its highest level in 12 months in both the EU (99.1) and the Eurozone (98.2), suggesting firms are becoming more confident about near-term hiring despite lingering macro uncertainty. Confidence rose across industry, services, retail trade, and among consumers, with construction the only sector showing a marginal decline. Full EU and Eurozone ESI release here.