Eurozone growth improving as firms cut prices, PMI survey says

Services industries such as restaurants reported growth in January

Eurozone business activity expanded to a five month high, according to a closely watched survey.

Markit's "flash" purchasing managers' index for January hit 5.2, up from 51.4 in December.

Any reading above 50 points indicates expansion.

But Markit found that firms are cutting prices at their fastest for nearly five years, reinforcing the argument for Thursday's huge European Central Bank stimulus programme.

The index for prices fell to 46.9 its lowest since February 2010.

The survey covers manufacturing, construction and services companies across the 19-bloc euro area.

Chris Williamson, chief economist at Markit, said: "The eurozone enjoyed a positive start to 2015.

"The rate of expansion remains worryingly weak, however, with the PMI running at a level consistent with GDP rising at a quarterly rate of just 0.2%, and the economy both fragile and susceptible to shocks and further setbacks.

"That said, there's good reason to believe the rate of expansion will continue to improve in coming months."