- Jonathan Loynes, an economist at Capital Economics Ltd.
Activity in the Eurozone's both manufacturing and services sectors contracted further in April, as the currency bloc struggled to emerge from a recession, adding to pressure on the European Central Bank to do more to boost growth and raising possibility of another rate cut soon. According to the London-based Markit Economics, region's manufacturing output stood at 46.5 in April, from 46.8 in the preceding month, while the preliminary services purchasing managers' index improved to a seasonally adjusted 46.6 from 46.4 in March. Despite some improvement in the services sector, both indexes remain below the 50 threshold, indicating shrinking activity. Last week, the ECB President Mario Draghi said the economic situation in the region had not improved since bank's last meeting on April 4.
"Added weakness in activity indicators and continued easing in inflation indicators will raise the pressure on the ECB to provide more stimulus," said Jonathan Loynes, an economist at Capital Economics Ltd. in London. "What form that will come in- interest rate cuts, LTROs or even bolder steps - remains to be seen."
Chris Williamson, chief economist at Markit, said: "Previously, we've seen Germany expand while other countries have contracted - notably Spain, Italy and France."
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