Tumbling factory output put the eurozone on course for more economic pain today and heaped more pressure on European Central Bank president Mario Draghi to cut interest rates.
Industrial production across the 17-nation single currency bloc fell 0.4% in January, far worse than the 0.1% slide forecast.
Factory output — two-thirds of which is generated by Germany, France and Italy — slid 1.3% year on year as Europeans struggling with record unemployment cut spending on cars, televisions and other manufactured goods. Germany and France, the twin engine-rooms of the eurozone, both recorded a contraction in manufacturing.
The ECB’s main interest rate is at a record low 0.75%, but experts said the case was building for another cut.
The region is also mired in a double-dip recession which is expected to last throughout the first half of this year.
IHS Global Insight’s Howard Archer said: “Although the worst of the manufacturing sector’s problems were probably seen around last October, it is plainly still finding a return to growth difficult.”
