EUROZONE economic growth slowed much more sharply than expected this month, a business survey showed, which along with weaker inflation suggests a stiffer policy challenge for the European Central Bank (ECB) ahead. The ECB will end its asset purchase program this year and hike interest rates in 2019, a Reuters poll found last month, although policymakers may be concerned to see inflation pressures easing alongside weakening growth. IHS Markit’s Eurozone Composite Flash Purchasing Managers’ Index (PMI), seen as a good guide to economic health, sank in May to an 18-month low of 54.1 from 55.1. A composite output price index fell to an eight-month low of 53.0 from 53.4. Eurozone inflation slowed to 1.2 percent in April, official data showed last week, moving further away from the ECB’s 2 percent target ceiling. Despite those easing price pressures, a PMI covering the bloc’s dominant service industry slumped to 53.9 from 54.7, missing expectations for a gentle slide to 54.6. (SD-Agencies) |