London Daily

Focus on the big picture.
Thursday, Oct 09, 2025

Euro zone business growth slipped in December as Omicron rose

Euro zone business growth slipped in December as Omicron rose

Euro zone business growth slowed more than expected this month as renewed restrictions imposed to curb the Omicron coronavirus variant curtailed the recovery in the bloc's dominant services industry, a survey showed on Thursday.

Europe is facing a fourth wave of infections and many governments have been encouraging citizens to stay home and avoid unnecessary social contact.

IHS Markit's Flash Composite Purchasing Managers' Index, a good indicator of overall economic health, dropped to 53.4 in December from 55.4 in November, its lowest since March and below the 54.0 predicted in a Reuters poll.

That headline number was dragged down by the services PMI, which sank to an eight-month low of 53.3 from 55.9. While above the 50-mark separating growth from contraction it missed the Reuters poll estimate for 54.1.

"The renewed decline in the Composite PMI in December suggests growth slowed to a crawl as tighter restrictions and growing consumer caution are taking their toll on economic activity, with the service sector bearing the brunt," said Michael Tran at Capital Economics.

Growth in demand for services dropped to its lowest since April - when it contracted - with the new business index falling to 52.6 from 54.2.

In the German private sector growth evaporated as restrictions hit the services sector in Europe's largest economy, earlier data showed.

Meanwhile, in France - the euro zone's second biggest economy and the only other country in the bloc to report flash data - activity expanded at a slower pace, a trend partly due to the new COVID-19 variant.

In Britain, outside the currency bloc, the new variant hammered hospitality and travel companies, sending private sector growth to a 10-month low, its PMI showed ahead of a Bank of England policy announcement due later on Thursday.

The Bank's decision is a close call. Investors had been largely betting against an increase in Bank Rate with the new coronavirus wave in full swing until data on Wednesday showed British consumer price inflation leapt by far more than expected and hit a decade-high in November.

PRICE PRESSURES EASE


Factories, generally less affected by coronavirus restrictions, also suffered somewhat and the manufacturing PMI dipped to a 10-month low of 58.0 from November's 58.4. An index measuring output that feeds into the composite PMI nudged up to 53.9 from 53.8.

In one brighter spot for policymakers at the European Central Bank, who meet later on Thursday, price pressures abated although remained high. The input prices index eased to 87.0 from 88.9, and the output prices index staged an even bigger fall.

"Price pressures have been easing in December, albeit only cautiously. It is a cautious sign of some easing pressures coming from supply shortages, which confirms some anecdotal evidence but it's way too early to conclude that the worst is behind us," said Bert Colijn at ING.

The ECB is set to halve the amount of assets it buys each month from April, according to a Reuters poll of economists, although interest rate increases are likely years away.

But as the vaccine roll-out continues apace, optimism about the year ahead improved. The composite future output index recovered to 66.5 from 66.1.

"Forward-looking indicators also offered a glimmer of hope. Year-ahead sentiment improved marginally in December, in part due to hopes of further easing in supply-side disruptions following some encouraging signs in December," said Ricardo Amaro at Oxford Economics.

Newsletter

Related Articles

0:00
0:00
Close
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
×