Activity in the euro zone services economy fell to a 21-month low in January, but the outlook appears to be brighter. The Reuters Eurozone Business Activity index, based on a survey of more than 1,500 services companies, fell 1.1 to 55.2 in January from 56.3 in December, the lowest reading since April 1999. The January fall was the fifth consecutive monthly drop.

But the index of business expectations, which charts whether companies see their business growing or shrinking in the coming year, was up 2.4 to 70.1 in January from 67.7 in December.

This was a five-month high although the index remains well below levels seen in the second half of 1999 and first half 2000.

A cautious outlook was also illustrated by the European Commission's euro zone business climate indicator, which fell to 0.95 in January from 1.23 in December.