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Euro zone growth slows

Euro zone growth slows
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Growth in the euro zone’s dominant service sector grew in June at its weakest pace since October.

There was an unexpectedly deep contraction in Italy and smaller euro zone countries which were masked by resilience in Germany and France.

The latest business surveys show firms are less optimism about the year ahead, in the face of sluggish new orders and rising interest rates.

In Britain, the Markit services purchasing managers index (PMI) showed growth was still not strong enough to generate any meaningful increase in employment.

The monthly surveys echoed earlier data from China, which showed growth in its fledgling services sector slowed slightly in June.

Still, the European Central Bank is expected to raise interest rates for the second time in four months on Thursday even analysts said though the PMI data provided little reason to do so.

Euro zone services business expectations hit a two-year low as firms worried about the global economic recovery and a tail-off in orders.

“It’s a global economy which is still expanding but the recovery is quite patchy at the moment and there is a lot of uncertainty still around,” said Mark Miller, global macroeconomist at Lloyds Bank Corporate Markets.

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