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^{Source: Markit, Insee via EcoWin}

France's private sector expands at fastest rate in 31 months

08.09 Some unexpectedly good PMI data out of France this morning.

France Composite Output index hit a 31-month high of 51.6 this month, up from 47.9 in February.

That marks an unexpected return to growth (anything above 50 indicates growth). The private sector has not expanded since last October.

Underpinning the return to growth was a rise in the level of new orders, to end a five-month period of contraction.

In the manufacturing sector, growth of new work picked up to a solid pace that was the sharpest in 34 months (partly boosted by a faster rise innew export orders).

Service providers signalled a marginal increase in new business, following five successive monthly falls.

Despite the pick up in new orders employment remained stable, but if new orders continue to rise, that is expected to change.

Jack Kennedy, senior market economist at Markit, said:

Much improved PMI data in March indicate that the private sector is moving in the right direction, with activity, new business and backlogs all returning to growth.

Improving conditions both at home and abroad were reported to have contributed to expansion, although there was further evidence that price discounting had been necessary to support sales.

If activity growth can gain some traction in the coming months then we could also see some improvement on the employment front, which would deliver a timely boost to confidence.

Chinese manufacturing slows for third month

07.57 Data out of China overnight showed that the country's giant manufacturing sector slowed for a third consecutive month in March to mark a weak first quarter for factory activity in the world's second largest economy.

HSBC and Markit's purchasing managers' index gave a reading of 48.1 in March, its lowest in eight months and below the 50 level that separates growth from contraction.

The closely-watched survey has given declining readings for five consecutive months, its longest losing streak since the 2008 crisis.

It signalled that weakness mainly came from weaker domestic demand.

Wei Yao, economist at Societe Generale, said the March result was particularly disappointing given that many had expected a pick-up after the Chinese New Year holidays at the end of January.

Markets remained sanguine despite signs of a slowdown. The Shanghai Composite added 0.8pc, while Japan's Nikkei ended the day up 1.77pc.

Robert Tayon, economist at Barclays, said the market reaction could reflect "speculation China will need to take action to meet its 7.5pc growth target".

What to watch

07.49 Some economic news out to day to keep an eye out for.

The latest French manufacturing and services PMI data for March is expected to show contractions. French manufacturing PMI is expected to come in at 49.6, while services are expected to remain moribund at 47.5.

The German manufacturing and services PMI data for March continues to perform well, but there are signs that it could well be starting to plateau a little, with both readings expected to slow slightly from their previous readings, coming in at 54.5 and 55.5 respectively.

The broader EU measures are also expected to slow slightly to 53 for manufacturing and 52.6 for services PMI.

Markets are set to open lower due to continued concerns over Crimea, as Michael Hewson, chief market analyst at CMC Markets, points out:

Markets in Europe look set to start the week on the back foot as concerns remain about the possible next movements of Russian troops on Ukraine’s eastern border ahead of a visit to Europe by President Obama, with the commander of NATO forces warning of the possibility of a move towards the Moldovan region of Transnistria.

Today's business stories

07.40 Here's what's leading our business pages this morning

• Harry Wilson writes that Britain's biggest lenders are in line for hundreds of millions in tax cuts under proposed changes to the bank levy after complaining that the burden fell disproportionately on domestic institutions

• Louise Armitstead writes that the Federation of Small Businesses and the consumer watchdog Which? have called for the “Big Six” energy companies to be broken up, adding pressure on regulators to refer the energy companies to competition authorities this week.

• Rebecca Burn-Callander writes that multinational companies such as Amazon and Apple will be forced to add VAT to all UK downloads including music, film, smartphone games and e-books from January 2015 in a move that may drive up the cost of music tracks from 99p to £1.19

Here's the front page of today's Business section:

Good morning

07.30 Good morning and welcome to our daily business and markets live blog, your one stop shop for all the breaking business stories of the day.

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