After the release of manufacturing data for the month of August earlier this week, the euro zone and UK will release services figures today to give a complete picture about the status of the economy in the third quarter.
In the euro zone, PMI manufacturing inched higher to 55.1, compared with the previous 55.0. The drop in demand and falling exports, that reached the lowest in nearly seven-month, signal that there will be more easing conditions and slowdown in economic activities.
Today's data is showing that services' expansion will ease to 55.6 from 55.8 recorded in July. Also, PMI composite is predicted to retreat to 56.1 from 56.7 a month earlier.
Trichet mentioned last month that the progress pace in the second six month is predicted to be not as strong as the first quarter especially amid the global slowdown led by the United States, the euro zone main trading partner.
Yesterday, the ECB left interest rate unchanged in September to boost recovery in the region. Despite the improvement signaled recently, the economy is still facing crucial threats represented in the high unemployment rate which is at 10.0%, the highest in 12 years and the mounting sovereign debt which forced euro-area government to introduce severe spending-cut plans to trim the deficit.
Moving to the UK, PMI services is expected to slide to 52.9 from 53.1 to continue the flurry of downbeat data released recently which suggested an ease in expansion in the second half of the year.
Earlier this week, the manufacturing index dropped to 54.3 in August compared with the previous 57.3, while yesterday PMI construction plunged to 52.1 from 54.1.
By the same token, the latest growth forecasts showed that the economy will grow 3.0% this year compared with the previous forecasts of 3.6%.
Next week, the BoE will the announce interest rate for September where it is expected that policy makers will hold both borrowing cost and APF quantity unchanged.
