Eurozone grows at weakest pace this year, survey shows

The eurozone's economic recovery slowed in August as output fell in France and Italy, a survey has suggested.

The Markit/CIPS Eurozone purchasing managers' index (PMI) was 52.5 in the month, down from 53.8 in July.

The score marks the economic bloc's weakest rate of growth in the year so far, Markit said, with output growth slowing in both the manufacturing and service sectors.

"The eurozone economy is defying expectations of gaining momentum, which will no doubt add to calls for the ECB to embark on full-scale quantitative easing," said Markit chief economist Chris Williamson.

The ECB is due to

make its latest decision on interest rates on Thursday.

Two of the major eurozone economies, France and Germany, had mixed fortunes last month, Markit's data suggest.

France's overall PMI reading for August was 49.5, suggesting continued contraction despite a slight increase in service sector activity.

Ructions in the French economy contributed to the French government being dissolved in August, and Markit figures suggest a sharp fall in manufacturing output.

Germany saw strong growth, but overall output growth slowed to 53.7 in August, down from 55.7 in July.

Italy dipped back into contraction in August, halting a seven-month sequence of expansion.

But Spain reached a 7.5-year high in output growth, and posted its sharpest rise in service sector activity growth since December 2006 after an increase in new business.

Ireland's output hit 61.8, a 14-year high.

BBC Business