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Euro zone business growth ground to a halt in Sept - PMI

Euro zone business growth ground to a halt in Sept - PMI
FILE PHOTO: The skyline with its financial district is photographed early evening in Frankfurt, Germany, October 8, 2018. REUTERS/Kai Pfaffenbach -
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Kai Pfaffenbach(Reuters)
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LONDON (Reuters) – Euro zone business growth has stalled this month, a survey showed on Monday, less than two weeks after outgoing ECB President Mario Draghi pledged indefinite stimulus to revive the bloc’s ailing economy.

Draghi’s term comes to an end next month, and on Sept. 12 the European Central Bank trimmed its deposit rate further into negative territory and promised bond purchases with no end-date to push borrowing costs even lower.

IHS Markit’s Euro Zone Composite Flash Purchasing Managers’ Index (PMI), seen as a good guide to economic health, suggested support for the stalling economy is needed.

It sank to 50.4 in September from 51.9 in August and below all forecasts in a Reuters poll that had predicted 51.9. That was just above the 50 mark separating growth from contraction and was its lowest reading since mid-2013.

A flash services PMI fell to 52.0 from 53.5 while a manufacturing index fell to 45.6 from 47.0. A Reuters poll had predicted 53.3 for services and 47.3 for manufacturing.

Indicating there won’t be much improvement soon, a services new business index dropped to 50.9 from 52.3 and a manufacturing new orders index fell to 43.1 from 45.9, a more than seven-year low.

But overall optimism picked up a touch from August’s six-year low. The future output index nudged up to 55.7 from 55.4.

(Reporting by Jonathan Cable; Editing by Hugh Lawson)

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