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Key data suggests the euro zone's economy is likely to post near-zero growth in the current quarter through September. Even the strongest members of the bloc are feeling the pinch.

Economic growth is stagnating in Europe, according to new surveys of the manufacturing and services sectors.

Manufacturing activity - which had been driving the recovery in the 17 nation euro zone, shrank for the first time since September 2009.

The bloc's dominant service sector is stagnant this month after two years of growth.

However the flash Purchasing Managers' Index data is better than expected.

The surveys were conducted by Markit -- a global financial information services company.

[Chris Williamson, Chief Economist, Markit]:
"Not to be too gloomy but order books just fell into contraction territory. For the first time in two years across manufacturing and services, there's a decline in demand for goods and services signalled here."

This will give little relief to policymakers struggling to contain the region's debt crisis.

It shows an economic slowdown is spreading to core members of the bloc, including Germany.

Earlier data from Germany showed its manufacturing sector growing faster than expected.

But growth in its service sector virtually ground to a halt.

The latest German ZEW survey of investor sentiment shows the biggest one-month drop in five years in August.

Markets largely shrugged that off - and the euro also made advances.