Eurozone business growth at its weakest for a year

Eurozone private business growth increased at its weakest pace for over a year in February, much worse than expected, after activity slowed in Germany and contracted in France, a survey showed on Monday.

The survey, which also provided further evidence of price cutting, is likely to solidify expectations of more monetary policy easing from the ECB in March.

Growth and inflation risks were already on the rise, the minutes of the ECB’s January meeting showed, and some policy makers are advocating pre-emptive action.

Markit’s Composite Flash Purchasing Managers’ Index for the eurozone, based on surveys of thousands of companies, fell to a 13-month low of 52.7 from January’s 53.6.

Economists recently polled saw an even chance the ECB will increase the size of its €60nn a month bond-buying programme when it meets in March, with another deposit rate cut seen as almost certain.

Suggesting Europe is already suffering the fallout from a global downturn, growth in Germany’s private sector slowed for the second month running in February while, in France, activity contracted for the first time in over a year.

Policymakers will also be concerned about the PMI output price sub index for the bloc, which fell to a one-year low of 48.6, further below the 50 mark that separates growth from contraction.