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The Bank of England's Inflation Report and industrial production from euro area are due on Wednesday, headlining a busy day for the European economic news.

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German, French Growth Creeps Above Forecasts In Last Months Of 2013 : Reuters

(Reuters) - Economic growth in Germany and France, the euro zone's two largest economies, marginally exceeded expectations in the fourth quarter and offered hope of a more robust 2014.

The euro zone number is due at 1000 GMT and forecast to show quarterly growth of 0.2 percent. Given the performance of its biggest constituent parts, that could be exceeded.

German growth accelerated to 0.4 percent on the quarter thanks to a rise in exports and capital investment, up from 0.3 percent in the previous three months.

The French economy expanded by 0.3 percent and statistics office INSEE revised up the third quarter figure to flat from -0.1 percent.

That meant France grew 0.3 percent over the course of last year, more than the government's estimate of 0.1 percent.

The German Statistics Office saw "mixed signals" from the domestic economy, which has driven growth throughout most of the year, with public expenditure stable and private consumption slightly below the level of the previous quarter.

"Capital investment developed positively," the Statistics Office said. "However a strong reduction in inventories put the brakes on economic growth."

The German Economy Ministry said on Wednesday it expected gross domestic product (GDP) growth of 1.8 percent in 2014 - more than four times faster than in 2013 as a whole.

"The rise in capital investment is very positive and signals that the German economy is starting the new year well," said Johannes Mayr, an economist at Bayern LB.

The European Central Bank kept policy steady earlier this month with President Mario Draghi declaring more information was needed before deciding on any action.

He cited fresh ECB staff forecasts which will be ready for the March policy meeting and the fourth quarter GDP numbers.

Spain has already reported fourth quarter growth of 0.3 percent, its second successive quarter of expansion. The government now expects growth this year of close to 1 percent, compared with an official forecast of 0.7 percent.

The Dutch economy grew by a solid 0.7 percent on the quarter.

The French government expects growth will accelerate this year to at least 0.9 percent, driven by a rebound in corporate investment.

President Francois Hollande's unpopular government was able to claim the first quarterly net creation of jobs since the start of 2012, recorded by non-farm payroll data from INSEE on Friday.

Finance Minister Pierre Moscovici nonetheless described the economy's strength as "unsatisfactory" and said faster growth was needed to create more jobs with unemployment at nearly 11 percent.

After hiking taxes during his first year in office, President Francois Hollande last month offered to phase out 30 billion euros ($41 billion) in payroll tax in exchange for commitments from businesses to hire and invest in France. ($1 = 0.7317 euros)

German and French economic growth at the end of 2013 exceeded expectations, underpinned by investment and foreign demand, official figures revealed Friday. The data bodes well for the larger euro currency bloc that is struggling to see a stable expansion. According to preliminary data from the Federal Statistical Office, German economic growth accelerated marginally to 0.4 percent.

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Germany's investor confidence deteriorated for the second straight month in February, reversing the improving trend seen in recent months, amid concerns over the faltering recovery in emerging market economies and the subdued outlook for the U.S. recovery.

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Flash Purchasing Managers' survey results from Eurozone, Germany and France are due on Thursday, headlining a light day for the European economic news.

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Fitch Ratings on Friday maintained Austria's coveted 'AAA' rating with 'stable' outlook despite seeing the one-off adjustments to gross general government debt related to financial sector support.

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Spain's producer prices logged the biggest annual fall in more than four years in January, statistical office INE said on Tuesday.

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French business confidence remained unchanged as expected in February, a closely-watched survey showed Tuesday.

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The internationalization of the Chinese yuan or renminbi, is still in the early stages and the currency may become the lead reserve currency in future, rivaling the U.S. dollar, the European Central Bank Executive Board member Yves Mersch said Wednesday.

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German retail sales grew at the fastest pace in seven years in January, staging a strong recovery from the slump in the final month of 2013. Retail sales were up a calendar and seasonally adjusted 2.5 percent, representing the biggest increase since February 2007, data from Destatis showed Friday.

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