London Daily

Focus on the big picture.
Saturday, Jul 26, 2025

Euro zone business growth slumped in June as price hikes bite

Euro zone business growth slumped in June as price hikes bite

Euro zone business growth has slowed significantly this month - and by much more than expected - as consumers concerned about soaring bills opted to stay at home and defer purchases to save money, a survey showed on Thursday.
S&P Global's flash Composite Purchasing Managers' Index (PMI), seen as a good gauge of overall economic health, slumped to 51.9 in June from 54.8 in May, far below the 54.0 predicted in a Reuters poll and its lowest level since February 2021.

"Euro zone economic growth is showing signs of faltering as the tailwind of pent-up demand from the pandemic is already fading, having been offset by the cost of living shock and slumping business and consumer confidence," said Chris Williamson, chief business economist at S&P Global.

The composite new business index dropped to a 16-month low of 50.0, the dividing line between growth and contraction, from 53.3.

A PMI covering the bloc's dominant services industry sank to 52.8 from 56.1, missing expectations for 55.5 and its weakest reading since April 2021.

Growth in demand for services all but dried up and firms faced input costs rising at a near record rate, forcing them to pass some of that burden on to customers. The input prices index rose to 78.3 from 77.4 and has only been higher twice in the survey's 24-year history - in March and April.

Inflation in the bloc hit a record 8.1% last month and could still go higher in coming months so the European Central Bank is expected to raise its deposit rate above zero for the first time in a decade in September, a Reuters poll found.

High prices meant demand for manufactured goods fell at the fastest rate since May 2020, when the coronavirus pandemic was taking hold, and the headline factory PMI fell to a near two-year low of 52.0 from 54.6. The Reuters poll had predicted a modest drop to 53.9.

An index measuring output, which feeds into the composite PMI, dropped to 49.3 from 51.3, its first time sub-50 in two years.

"Inflows of new business have stalled, led by a slump in demand for goods and reduced demand for services from cash-strapped consumers in particular," Williamson said.

"At the same time, business confidence has fallen sharply to a level rarely seen prior to the pandemic since the region’s economic contraction during the 2012, hinting at an imminent downturn unless demand revives."

With costs still soaring and supply chains disrupted factories cut back on purchases of raw materials and suggesting there would be little improvement anytime soon optimism waned. The future output index sank to 51.6 from 55.4, the lowest since May 2020.
Newsletter

Related Articles

0:00
0:00
Close
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
×