Eurozone economic growth has lost further momentum this month potentially reinforcing the European Central Bank’s case for keeping interest rates on hold, a new survey says. Financial Times

Growth slowed for the fourth consecutive month to the weakest for more than two years, the purchasing managers’ output index for the 13-country region shows.

After being hit last month by the global credit squeeze, growth in the service sector rebounded but manufacturing saw growth slip sharply and by more than expected, suggesting the euro’s rise to record levels and higher borrowing costs worsened by the recent global credit squeeze are taking their toll.

Highlighting the effect of the stronger currency, growth in new manufacturing export orders dropped to the slowest since May 2005.

“A shift to below-trend growth as we move into 2008 is becoming increasingly likely,” said Jacques Cailloux, economist at Royal Bank of Scotland, which released the survey with NTC Economics.

However, the data remained consistent with still-robust growth, especially compared with rates seen earlier this decade.