The euro zone’s economic contraction slowed more than expected in July, but an acceleration in the decline of French output suggested the currency area’s recovery from the deepest recession since World War II is likely to be gradual.

The flash reading of the euro zone’s composite output index, a closely watched gauge of private-sector activity, rose to a 10-month high of 46.8 in
July from 44.6 in June, Markit Economics said Friday.

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