German output in straitjacket

EURO-zone manufacturing slumped again last month, performing notably worse than in Britain or America, even though all three declined.

The closely-watched purchasing managers' index was 44.1 for the 12 countries participating in the single currency. This was worse than forecast. Anything below 50 represents contraction.

Germany, saddled with the euro's artificially high interest rates, did particularly badly, suffering its worst quarter since the survey began six years ago. France also fared poorly.

UK manufacturing outside the euro did better at 45.2, while America came in well ahead at 48.2. This was a sharp rebound from November's grim levels, and raised hopes of US economic recovery.

Manufacturing is suffering in all three major western currency blocs. In America, it has shrunk for 17 months in a row and, in Britain, it is declining at its fastest rate for three years.