Eurozone slump deepens

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Eurozone slump deepens

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The European Central Bank’s aggressive new bond-buying plan has not boosted business activity or sentiment in the eurozone.

The latest surveys of company purchasing managers show while the decline in Europe’s largest economy, Germany, did ease by a surprising amount this month, French firms are performing poorly.

Eurozone manufacturing was slightly better than expected, but there was a sharp downturn in the services industry.

A good indicator of economic performance, the composite eurozone PMI fell to 45.9 in September from 46.3 in August. Below 50 denotes contraction and survey compiler Markit said the surveys were consistent with a roughly 0.6 percent economic contraction in the third quarter.

“The fall in the PMI is another reminder that the ECB’s new asset purchase programme is not an answer to all of the region’s problems,” said Ben May, European economist at Capital Economics, in a research note.

“The euro zone recession looks set to deepen in the latter part of the year.”

Economists said the surveys made it more likely the ECB will cut its main interest rate at its next meeting in October, to a new record low 0.5 percent from 0.75 percent currently.

In Britain, suffering its own economic downturn, retail sales ticked down in August driven by a slump in online sales as Britons watched the Olympics on television, data showed on Thursday.