The eurozone has seen an ongoing steep decline as data shows the share currency bloc's economy is entrenched in the steepest downturn since mid-2009.
The eurozone debt crisis is pushing the region into its deepest downturn since the financial crisis, according to a closely watched survey.
In October, the region’s economy continued to contract sharply, the monthly initial flash estimate purchasing managers’survey (PMI) estimate from data provider Markit showed, indicating that activity has fallen in 14 of the past 15 months.
The headline reading was 45.8, little changed on September’s 45.7 anything below the 50-mark indicates a fall-off in activity. The services sector was particularly weak, dropping to a 40-month low of 45.7.
Officially, the eurozone only just edged back into recession in the third quarter of this year. However, Markit said the PMI data indicate the downturn is gathering pace “significantly”.
Researchers said the data were consistent with the eurozone contracting up to 0.5pc this quarter. Even the two largest economies, France and Germany, appear on course to shrink this quarter.
James Ashley, economist at RBC Capital Markets, said it was not clear when the eurozone would return to growth.
“The focus is increasingly on whether or not conditions will have stabilised by the start of 2013,” he said. “Should that [stabilisation] not materialise, it would not take much downside news to tip euro-area output for 2013 as a whole into another year of negative growth.”
The data came as markets wait for European finance ministers to reach a deal with the International Monetary Fund (IMF (Other OTC: IMFAF.PK - news) ) over how Greece should manage its debts, allowing the release of its latest €31bn (£25bn) tranche of bail-out funds.
The euro members want to extend a deadline by which it must reduce its debt, but the IMF favours these nations taking a writedown on their loans to Greece.
Ahead of next Monday’s meeting to attempt to reach a deal, Olli Rehn, the European Commissioner for Economic Affairs, told the European Parliament: “I trust everyone will reconvene in Brussels on Monday with the necessary constructive spirit, and move beyond the detrimental mindset of red lines.”
Greece is suffering in the absence of an agreement, said Antonis Samaras, its prime minister, warning that “every day that goes by without a decision will burden the economy, its psychology, its markets and citizens and Greeks’ pride.”
A Greek pensioner yesterday was arrested after he threatened to set himself on fire inside a state finance office. He was thought to have been implicated in a fraud case years ago and to have been protesting at the seizure of his assets.
A number of Greeks have threatened to kill themselves at tax offices or banks, in various protests in recent years.