LONDON (AP) – Further evidence emerged Wednesday to suggest the 18-country eurozone is more likely to sink back into recession than stage a strong rebound, adding pressure on the European Central Bank to enact a further stimulus in the months ahead.
However, with ECB policymakers gathering in Frankfurt for their monthly policy meeting, few economists think they will be inclined to announce further measures on Thursday, especially as the euro continues to fall against the dollar and oil prices have dropped sharply. A weaker currency can boost growth by lifting exports, while cheaper energy can cut consumers’ fuel bills.
For now, the picture remains uninspiring, at best.
Though the monthly purchasing managers’ index – a broad gauge of business activity – from financial information company Markit rose 0.1 percentage points in October to 52.1, the index still points to very modest growth. Anything above 50 indicates expansion.
“The eurozone PMI makes for grim reading, painting a picture of an economy that is limping along and more likely to take a turn for the worse than spring back into life,” said Chris Williamson, Markit’s chief economist.