Euro zone business activity contracted at the fastest pace in nearly two years in October as the cost-of-living crisis kept consumers cautious and sapped demand, according to a survey.Factories have been particularly hard hit by energy price rises and due to supply chains still recovering from the coronavirus pandemic taking a hit from Russia's invasion of Ukraine.
October was the fourth month below the 50 mark separating growth from contraction and was the lowest reading since November 2020. "Demand is falling sharply and companies are increasingly growing worried over high inventories and weaker than expected sales, especially as winter approaches. The risks are therefore tilted towards the downturn accelerating towards the year-end," he added.
A PMI covering the bloc's dominant services industry dropped to 48.2 from September's 48.8, in line with the Reuters poll but the lowest point in 20 months.