The composite eurozone PMI slumped to 48.1, as the services sector unexpectedly dropped to 49.2, raising the likelihood of a 50bp rate cut in September.
The services sector had been the last pillar supporting eurozone growth; its decline means that without quick action, a recession becomes inevitable.
The risk of economic downturn in the eurozone is heightened, leading policymakers to consider more aggressive monetary easing to support the faltering economy.
While rate cuts may provide short-term relief, they alone cannot resolve the deeper structural issues stalling eurozone growth.
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