The European economy continues to receive pressure from the recent closures implemented to curb the resurgence of coronavirus cases.
The latest PMI data showed a faster contraction in French business activity in January, partly driven by stricter coronavirus restrictions. It exhibited a contraction for the fifth consecutive month with service providers recording a larger decline than ever before.
In contrast to manufacturing activities in France which showed better expansion than expected this month.
The manufacturing sector in Germany, on the other hand, is still growing despite a slight deviation from previous market forecasts and readings. While German service activity still recorded a decline, it was better than expected.
Overall, business activity in the European Zone remained under contraction, falling to a two-month low in January.
According to the head of business economics at IHS Markit, the European Zone does not seem to be able to avoid a double recession following the performance in the latest data.
Meanwhile, in addition to economic data in the European Zone, the market was also shown with the issuance of data from the UK which saw a significant decline in both sectors.
The UK manufacturing sector fell to a 7-month low and far strayed from market forecasts and readings recorded in the previous month.
Business activity, on the other hand, received a blow from the implementation of stricter restrictions that led to a reduction in consumer spending, recording a larger contraction in January.
