Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said:
“The flash PMI for June rounded off the weakest quarter for three years, indicating Eurozone GDP is likely to have fallen by 0.6%. The downturn is gathering pace and spreading across the region, with Germany on course for a marginal fall in GDP in the second quarter, though far steeper declines are likely elsewhere – including a 0.6% drop in France.
“Of particular concern is the near-record deterioration in business optimism, combined with marked falls in employment and purchasing by companies. This suggests that firms are preparing for conditions to worsen in the coming months, with the darker outlook often attributed to uncertainty caused by the region’s ongoing economic and political crises.
“Weak demand has resulted in lower price pressures, especially in manufacturing. This bodes well for consumer inflation, which is likely to fall further from its current rate of 2.4%, perhaps allowing policymakers some extra leeway to stimulate growth and help revive business confidence.”
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