S&P assesses Eurozone business activity in October

Euro zone business activity contracted last month at the fastest pace since late 2020 as high inflation and fears of an intensifying energy crisis hit demand, according to a survey suggesting the bloc is heading for a winter recession.

Report informs, citing Reuters, that inflation in the 19 countries using the euro surged more than expected last month, reaching 10.7% and more than five times the European Central Bank's target, so the ECB is likely to press ahead with more interest rate rises and add to the burden faced by indebted consumers.

S&P Global's final composite Purchasing Managers' Index (PMI) for the euro zone, seen as a good guide to economic health, fell to a 23-month low of 47.3 in October from September's 48.1, albeit just above a preliminary 47.1 estimate.

Anything below 50 indicates contraction.

The new business index fell to 45.0, from 46.3 in September, its lowest reading since November 2020.

A PMI covering the bloc's dominant services industry nudged down to a 20-month low of 48.6 from 48.8, although above the 48.2 flash estimate.