Europe edges back to recession

The eurozone was poised to enter a technical recession as private sector business activity declined for the seventh month while Ireland was the only bright spot.

The Department of Finance revised down its underlying budget deficit for 2011 to 9% of GDP, well below the 10.6% EU/IMF target.

Ireland posted a strong monthly rise of 1.7% in retail sales in July while they fell across the eurozone generally. The Purchasing Managers Index (PMI) was at a two month high for Ireland at 51.4, compared to 46.3 for the eurozone bringing it into negative territory of below 50.