Berlin (Reuters) – According to a survey, the economy in the euro area surprisingly accelerated its decline in October.
The purchasing managers’ index for the private sector – industry and the service sector together – fell by 0.7 points to 46.5 points in October, as the financial services provider S&P Global announced on Tuesday in its survey of thousands of companies. This is the lowest level in around three years. Economists surveyed by the Reuters news agency had expected a slight increase to 47.4 points. The barometer only shows growth above the threshold of 50 points.
“Things continue to go downhill in the euro zone,” said chief economist Cyrus de la Rubia of Hamburg Commercial Bank (HCOB), which sponsors the survey. He points out that the manufacturing sector has been in a downward trend for 16 months and the services sector for three months. Overall, there are many signs that point to another weak quarter: “We would not be surprised if we experienced a slight recession in the euro zone in the second half of the year,” said de la Rubia. Economists speak of a technical recession when the economy contracts for two quarters in a row.
The economy in the euro zone is also being burdened by the sharp rise in key interest rates, with which the European Central Bank wants to keep up with inflation. There are now signs of success for the monetary authorities in the fight against inflation. Experts assume that the ECB Council will decide to pause interest rates at its interest rate meeting on Thursday in Athens. The ECB has already increased the key rates ten times in a row since summer 2022. With a deposit rate of now 4.00 percent, the interest rate peak could have been reached for the time being.
(Report by Reinhard Becker, edited by Rene Wagner. If you have any questions, please contact our editorial team at [email protected])