Eurozone economy 'goes into reverse'

The eurozone economy flipped into reverse in September, falling to its worst level in more than two years, a closely-watched survey showed on Wednesday. Ahead of new growth figures expected to show the debt-laden currency area slipping towards recession, the final Eurozone Composite Output Index compiled by London-based researchers Markit logged 49.1 points, compared with 50.7 in August. A score below 50 indicates contraction. Markit noted "faster rates of contraction in Italy and Spain accompanied by near-stagnation in France and Germany." The survey also highlighted a sharpening rate of decline for new business orders, as well as slowing job creation. The indicator implied the first drop in growth since July 2009, with the firm's "average reading for the third quarter as a whole" just 50.3 -- "signalling a stagnation of activity," it said. "The final PMI for September is even more gloomy than the earlier flash reading, providing confirmation that the eurozone recovery has ground to a halt," said Markit chief economist Chris Williamson. Added Howard Archer of key analysts IHS Global Insight: "Contraction in the eurozone's key services sector during September, coupled with a marked decline in new business, heightens concern that the eurozone could be heading back into recession." According to the analyst, despite a steep climb in inflation, the news "puts pressure on the ECB to cut interest rates as soon as Thursday" at president Jean-Claude Trichet's final policy meeting.