The eurozone heads into the valley

23 June 2008 By Ian Campbell

The latest surveys suggest minimal German economic growth, while France shrinks and Spain and Italy fall sharply. Rampant commodity inflation is making consumers poorer and businesses more cautious. The ECB won t try to support growth. It s set to raise interest rates in July.

This content is for Subscribers only

Context News

Output in the eurozone fell in June from May, according to purchasing managers' indices compiled by RBS. Services sector output dropped from 50.6 in May to 49.5 in June—below the 50 mark that divides expansion from contraction. Manufacturing output fell to 49.1 from 50.6. A composite index for services and manufacturing fell to 49.5 from 51.1 in May and was the lowest reading since July 2003.

Meanwhile inflationary pressures continued to rise. The indices showed input price inflation up to 67.4 in June from 64.4 in May, the worst reading sinec October 2000. Firms' output prices rose to a seventeenmonth high of 55.6 from 54.8 in May.

The Munichbased Ifo research institute said its June business climate index for German fell to 101.3 from 103.5 in May, the lowest reading since January 2006. Its business expectations index, which gives firms' view of prospects in six months' time, fell to 94.7 from 97.2 in May, the lowest reading since September 2005.

Context News

Email a friend

Please complete the form below.

Required fields *