Services activity in Germany, Europe's largest economy, contracted for a second month running in August as domestic demand came under pressure from soaring inflation and faltering confidence, earlier figures showed. That prospect of recession whacked investor morale in the currency union and it slumped in September to its lowest since May 2020, another survey showed. "The revision is mainly due to developments in energy prices which, even after retreating over recent days, remain elevated and which mean that the impact on household spending will be larger than we hitherto anticipated."Ī worker wears a protective mask at the Volkswagen assembly line after VW re-starts Europe's largest car factory after coronavirus shutdown in Wolfsburg, Germany, April 27, 2020, as the spread of the coronavirus disease (COVID-19) continues. "The PMI surveys signal that the euro area is entering recession earlier than we previously thought, led by its largest economy Germany, and we now see the euro area 'enjoying' a longer, three quarter recession," said Peter Schaffrik at the Royal Bank of Canada. S&P Global's final composite Purchasing Managers' Index (PMI), seen as a guide to economic health, fell to an 18-month low of 48.9 in August from July's 49.9, below a preliminary 49.2 estimate. Gas prices on the continent soared as much as 30% on Monday, stoking fears of shortages and reinforcing expectations for a recession and a bitter winter as businesses and households are battered by sky-high energy prices.
cents for the first time in 20 years on Monday after Russia said gas supply down its main pipeline to Europe would stay shut indefinitely.
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Register now for FREE unlimited access to RegisterĪ rise in borrowing costs would add to the woes of indebted consumers, yet in a Reuters poll last week almost half of the economists surveyed said they expect an unprecedented 75 basis-point rate hike from the ECB this week, while almost as many forecast a 50 bps hike.ĭespite those expectations the euro dropped below 99 U.S.
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