A ‘toxic cocktail’ of stagflation in the eurozone

The eurozone's economic outlook is bleak, with stagnant economic activity and rising inflation. And with the ECB talking rate-rises, it risks a nasty slowdown.

The eurozone's economic outlook is "getting clearer", said Ian Campbell on Breakingviews. "It looks bleak". Inflation is at a 16-year high of 3.7%, and an index of purchasing managers this week showed that manufacturers' output prices hit a 17-month high as their input prices hit a 23-month peak.

At the same time, the survey showed that both manufacturing and services activity fell below the level dividing contraction from expansion, with the composite measure covering both sectors falling to the lowest level in five years. A separate gauge of German business confidence slid to a two-year low.

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