A survey has shown that manufacturing activity in the euro zone fell at the fastest pace in more than five years in July.
The euro zone's purchasing managers' index (PMI), compiled by research group Markit, slid to 47.4 points in July from 49.2 in June.
The drop, the steepest monthly fall since June 2003, marked the second month running below the key 50-point threshold that indicates that activity is declining.
Similar figures from Britain showed that its manufacturing activity fell for a third straight month in July and at the sharpest rate in almost a decade. This came as firms struggled with record price pressures and a slump in orders.
The CIPS/Markit PMI fell to 44.3 last month from 45.9 in June, the weakest since December 1998.
Despite this, record price pressures in the manufacturing sector are also likely to keep hopes for lower interest rates in check. The input price index, which dates back to January 1992, edged up to a record 82.4 last month from 82.1 in June.
