LONDON, March 21 Reuters Euro zone business activity was within a whisker of returning to growth in March, outperforming expectations, according to a survey which showed inflationary pressures bucked a recent trend and eased this month.

However, the recovery was uneven with a strong rebound in services activity offsetting a more severe downturn in manufacturing. There was a similar divide between the bloc39;s two biggest economies, Germany and France.

HCOB39;s preliminary composite Purchasing Managers39; Index PMI, compiled by SP Global, rose to 49.9 this month from February39;s 49.2, ahead of expectations in a Reuters poll for 49.7 but marking its tenth month below the 50 level separating growth from contraction.

Muddling through remains the name of the game for the euro zone economy in Q1, but green shoots are emerging, said Bert Colijn at ING.

Germany39;s economic downturn eased slightly in March as business activity in the service sector of Europe39;s largest economy came close to stabilising, earlier data showed.

However, in France the downturn deepened as demand for French goods and services deteriorated and employment fell.

Meanwhile in Britain, outside the European Union, businesses kept up their recovery from recession but stubborn price pressures could bolster the Bank of England39;s waitandsee approach to interest rates.

Indexes covering the overall cost of operating and prices charged in the euro zone eased this month but remained elevated, with the…