European economic growth is quickening, but far from racing

Growth in France probably will be 2.2% this year, up from an earlier estimate of 2.1%, the Bank of France said.

The German government, meanwhile, is reported to be close to raising its annual forecast to 2.4% from 1.6%.

One of the key factors lifting optimism has been lower oil prices, after they hit record highs earlier this year.

The high crude prices boosted petrol and energy costs, acting like an extra tax on consumers and companies.

With oil prices sliding, analysts said that spending may increase, helping drive European growth forward.

'Favourable' outlook

France's central bank raised its forecast for growth in the third quarter to 0.5%, up from a previous estimate of 0.4%.

Its estimate for full year growth of 2.2% compares with a government forecast of between 2% and 2.5% growth.

"The outlook for activity remains favourable for the coming months," a Bank of France spokesperson said, adding that the automotive industry remained a problem area.

According to the Reuters news agency, which quoted an unidentified government source, Germany is very close to lifting its growth forecasts.

German Economy Minister Michael Glos declined to confirm the figures given by Reuters, but said that the direction of change in the annual growth forecasts was correct.

Should the forecast for German growth of 2.4% be proved correct, then it would be the country's quickest rate since 2000.

Last week, the European Commission trimmed its growth estimates for the eurozone, which includes France and Germany and the other nations using the euro.

According to the Commission, the eurozone's economy would still expand by about 2.5% in 2006, its best rate of expansion since 2000.