Euro zone business activity unexpectedly contracted this month due to an accelerating downturn in manufacturing and a near-stalling of service sector growth as burgeoning costs pushed consumers to cut back on expenditure, a survey showed.
“The euro zone economy looks set to contract in the third quarter as business activity slipped into decline in July and forward-looking indicators hint at worse to come in the months ahead,” said Chris Williamson, chief business economist at S&P Global. The PMI covering the bloc’s dominant services industry dropped to a 15-month low of 50.6 in July from 53.0, below all the predictions in the Reuters poll that had indicated a fall to 52.0.
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