The Eurozone economy has cooled more than expected this month and the services sector has entered contraction territory, according to the PMI economic barometer published today.

According to Reuters, the composite purchasing managers' index (PMI) of the Eurozone retreated to 47 in August, compared to 48.6 in July. This is the worst reading since November 2020 and a much bigger drop than expected by economists surveyed by the agency, who predicted a slight decline in the index to 48.5.

All readings below the 50 mark point to contraction.

Meanwhile, the services sector PMI index fell from 50.9 in July to 45.2 in August, the first time it has dipped below 50 this year.