Euro zone private-sector growth hit a two-year low in September as new orders plunged, although business confidence stabilised, a survey found this morning.
The services sector took the hardest hit, with the RBS/NTC Economics flash services PMI down four points to 54 from 58, the worst tumble in the nine-year history of the index and the lowest level since August 2005.
That was much weaker than the 57.5 forecast.
The RBS/NTC flash manufacturing PMI fell to 53.2 from 54.3 in August, its lowest point since November 2005 and also weaker than the 53.9 forecast.
Both indexes remain well above the 50 mark that separates growth from contraction, but the dramatic falls will further support the view that the European Central Bank has likely put off any further interest rate rise well into the future.
The figures provide clear evidence that turmoil that has seen stock and foreign exchange markets swinging wildly and the European Central Bank pumping temporary funds into money markets to alleviate soaring rates has affected the real economy.
NTC said the data was collected September 12th to 20th, and around 15 per cent of total responses came in after the US Federal Reserve cut rates on Tuesday, adding it was tough to assess how broad-based the deterioration really was.