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Eurozone faces its darkest days since 2009

The Eurozone economy is set to experience its weakest quarter since the height of the economic crisis in the early days of 2009. The latest business surveys show that Eurozone companies are struggling to receive enough orders to remain viable.

According to the latest Markit Purchasing Managers Indexes (PMIs) the Eurozone is slipping further into recession despite a slight easing of the decline of manufacturing. The flash service PMI slumped to 45.7 for November, its lowest level since July 2009 and failed to match economists’ expectations that the figure would hold at 46.0. Hotels and Banks were the worst affected services whilst the majority of the European economy suffered badly and the rate of redundancies and layoffs increased.

Business activity has now declined in 14 out of 15 months with the exception being a slight increase in January. The ongoing drop in business output reflects the steepening deterioration in the creation of new businesses and shows a sharper rate of decline then what was feared.

“The concern about the outlook is getting worse as we move towards the end of the year,” said Chris Williamson, chief economist from Markit. He added that German businesses were becoming increasingly pessimistic about the coming year. “If the domestic economy of Germany, the largest euro zone nation, is weakening, then that bodes ill for the rest of the region, especially as there’s little trade picking up outside the region.”

The PMI’s are indicating that the region’s economy will shrink by around 0.5% in this quarter instead of the 0.1% figure released last week by the EU. Markit predicts that the figure could be even worse. “The factors that were helping to prop up the official data in the third quarter won’t be apparent in the final quarter of the year. So you are going to see deterioration in those official numbers.”

The Pound to Euro exchange rate is currently trading at 1.2415

The Pound to US Dollar exchange rate is currently trading at 1.5951

The Pound to Australian Dollar exchange rate is currently trading at 1.5393

The Euro to US Dollar exchange rate is currently trading at 1.2851

The Euro to Pound exchange rate is currently trading at 0.8054

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