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Economic growth of the eurozone slowly continued in August, according to extraordinary market managers S&P Global (PMI), which provides the latest information on how enterprises work.
The complex PMI index, which includes services and production, increased by 0.2 points in August to 51.1 points, which indicates that the business has increased at the fastest pace since May 2024.
This suggests that the GDP of the eurozone increases in the quarterly rate by 0.2% in August, according to expectations, after GDP growth by 0.1% in the second quarter.
Nevertheless, “the level of expansion remained disappointing sluggish,” S&P Global notes.
The business in the block was mainly prompted by new orders, which increased for the first time in 15 months, both for the production sector and for the service sector.
In accordance with the extraordinary PMI production index, Eurozone transfers were interrupted.
Production increased to 50.5 in August from 49.8 in July.
The PMI services index slightly decreased, but remained above 50 points (50.7), which indicates growth.
France made improvements. According to the data, enterprises in the country are approaching stabilization, and PMI indicators were just below 50 points. This indicates a moderate increase in GDP in France still in the third quarter, according to the report.
Meanwhile, the increase in production activities helped Germany to report the third monthly increase in the total production during August. Nevertheless, the largest economy in Europe also recorded a sluggish service in the service sector.
“The general growth of production, however, was the fastest since March, which indicates that in the third quarter in the third quarter it is again indicated that the German GDP.
The rest of the eurozone “continued to surpass Germany and France, but in August lost some impulse, especially in the service sector,” Barclays notes in her analysis.
At the front of the labor market, the August PMI Sruck Index showed another small increase in employment in the eurozone.
According to S&P Global, PMI testimonies in August for business and prices, as well as employment, show that for the European Central Bank there is a place to further reduce key interest rates. However, a slight increase in inflation in the service sector remains risk.
The ECB has currently reduced interest rates by 25 basic points eight times from June 2024, as a result of which the deposit rate is up to 2%.
UK: faster growth rates per year
In a separate set of data, the British study of PMI in August showed that the level of economic growth continued to accelerate in the summer after sluggish spring.
The PMI complex was 53.0 points, from 51.5 points in July, noting its highest price in August. According to S&P Global, this shows that GDP increases with a quarterly rate by 0.3%.
The increase is associated with the service sector. And although the production of production decreased in August, it did it slightly, which indicates stabilization after a long period of a sharp reduction.
The study notes that the demand for British enterprises remains fragile, sprinkled with fears about the influence of recent changes in state policy and wider geopolitical uncertainty.
Meanwhile, export of goods is still reduced, and wages continue to decline. This is combined with constant inflation, leaving the Bank of England a little space to reduce the main interest rates this year to stimulate the economy.