The latest economic data from the eurozone, released yesterday, confirmed that the 19-member bloc appeared to be moving towards a period of slower output growth, putting the European Central Bank on notice over its plans to raise interest rates.

Industrial production fell 1.7pc in November from October and was down 3.3pc from a year earlier. The numbers showed the declines were across all countries and included consumer durables and capital goods as well as cars and energy.

“For now, we think the eurozone probably eked out a small increase in GDP in the fourth quarter because the retail sales figures for October and November were positive and the business surveys still suggest that output was not falling sharply. But the eurozone has clearly shifted down a gear,” said Andrew Kenningham, Chief Europe Economist at Capital Economics.

Any fall-off in activity in the bloc will be of deep concern to the European Central Bank, whose meeting minutes from December showed some rate setters were worried its economic forecasts were too optimistic.

The ECB has now stopped adding to its €2.6trn of bond purchases and has said it expects to be in a position to increase interest rates this year. One risk for Europe’s trade-dependent economy is that it gets caught in the crossfire between Washington and Beijing and hit by a slowing global economy.

A separate release yesterday showed that the bloc’s goods trade surplus shrank in the third quarter to €68.7bn from €80bn in the second quarter and €91bn a year ago, which appeared to show slowing demand.

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