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Euro zone business growth almost stalled in Jan - PMI

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Euro zone business growth almost stalled in Jan - PMI

Euro zone business growth almost stalled in Jan - PMI

Euro zone businesses started the year by expanding at their weakest rate since mid-2013 as a manufacturing slowdown spread to services, according to the final PMI readings for January.

David Pollard reports.


Euro zone business growth almost stalled in Jan - PMI

After a diet of gloomy manufacturing PMIs last week, markets were braced for the same from services on Tuesday.

And more or less got them.

The euro zone's final services reading for January held steady at December's 51.2 - a reading over 50 denotes expansion.

But less positive was the overall composite reading: at 51, it suggests business activity across the bloc grew at its weakest rate since mid-2013.

Of the two largest economies, German activity accelerated .... But France's sank to its lowest in over four years.

And amid the trade tensions that have buffeted the global economy, analysts now see signs of a slowdown in manufacturing spreading to services.

As for China/US trade tensions themselves: if they get worse, then brace for a huge impact, the UN said on Monday.

(SOUNDBITE) (English) UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD) INTERNATIONAL TRADE DIVISION DIRECTOR, PAMELA COKE-HAMILTON, SAYING: "If, barring an agreement between the United States and China, on March 1 tariffs will escalate to 25 percent, which is a significant difference from 10 percent as it currently exists, the implications are going to be massive.

First of all, at a macro-economic level: we'll see an economic downturn, especially due to instability in commodities and financial markets." Britain's services - with a PMI reading of 50.1 - were barely in expansion, according to the survey.

And - as Brexit looms - the sector reported job cuts for the first time in six years.

Here though (Japan), there was an improvement.

Boosted by a pick-up in domestic demand, Japan's services sector notched up a PMI of 51.6 in January - from 51 in December.

The world's number three economy the one upside surprise of the day .... And even more so after its manufacturing PMI last week showed factory activity had skidded to a 29-month low.

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