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STORY: Business activity across the euro zone has stalled again this month.

That’s according to a closely watched survey, the purchasing managers index (PMI).

Activity remained contracted as demand from both home and abroad fell - despite firms barely increasing prices.

The PMI reading was slightly up in October at 49.7 - from September’s 49.6.

But for the second straight month it remained below the 50 mark, which separates growth from contraction.

It also came in lower than analysts’ expectations.

With one remarking that the PMI’s slight increase from September came from an easing contraction in manufacturing - but that was “hardly something to cheer about.”

Business activity in Germany, Europe's largest economy, shrank in October but less steeply than in September, according to its PMI.

In France, the dominant services sector contracted at its sharpest rate in seven months, dragged down by sluggish new orders.

The PMI for Britain, outside the European Union, showed businesses reported their slowest growth in 11 months.

Also, hiring shrank for the first time this year as uncertainty ahead of the Labour government's first budget dampened confidence.