LONDON: A slowdown in euro zone business growth at the start of the second half of 2017, alongside declining inflation pressures in a key business survey, could put paid to expectations of a stimulus clawback by the European Central Bank later this year.
Years of ultra-easy policy have bolstered still-solid growth, but inflation is nowhere near the European Central Bank’s 2 per cent target ceiling and even shallower price rises this month will provide disappointing reading for policymakers.
Germany and France, the two largest economies in the club, missed expectations, suggesting an even more robust pace of business activity in many of the bloc’s other members.
IHS Markit’s Euro Zone Flash Composite Purchasing Managers’ Index for July, seen as a good guide to economic growth, fell to 55.8 from June’s 56.3, still comfortably above the 50 level that separates growth from contraction. — Reuters
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