Europe Signals Steeper Slump

Via The Wall Street Journal

by Ilona Billington & Emese Bartha

Europe’s three biggest economies started the year with early signs of a steepening slump.

Industrial production crumbled during the first month of the year in France and the U.K. But many economists focused on the sharp drop in Germany’s exports as spelling trouble for the region’s biggest economy.

With Europe’s big manufacturers and exporters starting the year badly, hopes that receding economies will find a bottom are being pushed back to the summer at the earliest.

The services sector is faring little better, with a February survey released last week hitting a new low as firms across the currency bloc slashed more jobs than at any time in the survey’s 12-year history.

The European Central Bank, which expects a 2.75% fall in gross domestic product in the 16 countries sharing the euro currency this year, already is signaling another cut in interest rates to rekindle demand.

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