Eurozone economy grows at slowest pace in six months

London - Growth in the eurozone economy started the third quarter at the weakest pace in six months as manufacturing cooled.

A composite Purchasing Managers’ Index fell to 55.8 in July from 56.3 in June, IHS Markit said on Monday. The figures indicate that gross domestic product is expanding at a 0.6% quarterly pace, compared with 0.7% in the second three months of the year.

European Central Bank (ECB) President Mario Draghi said last week that that the region isn’t yet ready for a reduction in the unprecedented stimulus. While growth appears to be firming, prices aren’t picking up fast enough to get to the ECB’s target without help from record low interest rates and continued bond buying.

“The eurozone’s recent growth spurt lost momentum for a second month, but still remained impressive,” said Chris Williamson, chief business economist at IHS Markit. It “adds to the belief that ECB policy makers are in no rush to taper.”

Increases in manufacturing costs are starting to slow, with the rise in input costs the lowest since November, Monday’s report showed. Growth in new orders and employment is still strong. Earlier reports showed that French and German economies lost some momentum this month.

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