Economic activity in Europe continued to show significant weakness after data showed both the manufacturing and services sectors contracted in August.
Europe's largest economy, Germany experienced the sharpest contraction in private sector activity since May 2020, with the manufacturing sector at a three-year low and services for the first time falling below the contraction to the weakest level in eight months.
**The number 50 separates the difference between expansion and contraction of an activity. If the reading above 50 indicates expansion, while below 50 the opposite.
Total new order inflows contracted for the fourth consecutive month due to a continued decline in new export business.
In addition, input cost rates and output charge inflation in both sectors also showed an increase for the first time in 11 and 7 months respectively.
Overall, both major sectors in the European Zone contracted this month, with manufacturing activity coming in slightly better than expected while services fell sharply.
In addition, the European session market was also shown by the release of PMI data from the UK which showed that manufacturing and service activity also fell into contraction in August.
This indirectly shows that the UK economy is beginning to receive pressure from weakened activity amid interest rates that continue to rise high to curb inflation.
