London. Data released on Friday showed that the global economy appears likely to enter a sharp slowdown, just as central banks aggressively reversed the ultra-easy monetary policy adopted during the pandemic to support growth.
Business activity in the United States, the world’s largest economy, contracted this month for the first time in nearly two years; In the eurozone it fell for the first time in more than a year and in the UK growth has stalled at its lowest level in the past 17 months, according to surveys of purchasing managers.
Standard & Poor’s Global said on Friday that its preliminary index of the US composite manufacturing PMI fell much more than expected from a reading of 52.3 in June to 47.5 this month. This is the fourth consecutive monthly decline, driven by weakness in the services sector, which has shrunk enough to offset weak growth in the manufacturing sector.
A reading below 50 indicates that business activity has contracted, so the report will fuel the debate over whether the US economy has slipped back into recession – or is close to it – after rebounding sharply from the recession. From early 2020 to the start of the COVID-19 pandemic.
Contracts for commercial activity in the Eurozone
The Composite Managers’ Index revealed that business activity in the euro zone contracted this month due to a slump in the manufacturing sector and a halt in the services sector, as rising costs prompted consumers to cut spending. A good indicator of general economic health, it fell from 52.0 in June to 49.4 in July, well below all expectations.
Eurozone businesses remain under pressure from inflation, which hit 8.6 percent in the monetary union last month, and on Thursday the European Central Bank raised interest rates more than expected, emphasizing that rampant inflation fears are now weighing on growth considerations.
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