S&P Global announced the main data of the October Purchasing Managers’ Index (PMI) for the Euro Zone.

Thus, the composite PMI for the region, which was 47.2 points in September, decreased to 46.5 points in October.

Thus, in October it fell to its lowest level since November 2020, due to the effect of the increase in interest rates in the region made up of 20 countries and the reduction in demand in private sector activities.

SERVICE PMI AT LOWEST LEVEL IN 32 MONTHS

Market expectations for the composite PMI, which was below the 50-point level indicating growth in economic activities, would rise to 47.4 points.

The services sector PMI in the region fell from 48.7 to 47.8 in October, falling to the lowest level in the last 32 months.

The manufacturing PMI fell from 43.4 to 43 points in the month in question, falling to its lowest level since May 2020. The expectation was for the index to rise to 43.7.

Meanwhile, the European Central Bank (ECB) is battling rising interest rates and high inflation. This increases credit costs for consumers and slows the economy by making investments in construction and other sectors more expensive.

‘THE PERIOD OF HIGH INTEREST MAY NOT LAST LONG’

The deepening contraction of private sector activities in the euro zone caused investors to assess that ECB President Christine Lagarde’s “high for a long time” interest rate rhetoric might not last as long as some analysts expected.

The next ECB interest rate meeting will be held on October 26. In terms of pricing in money markets, it is considered certain that the ECB will keep the three main official interest rates constant.

In PMI data, above 50 points indicates growth, while below 50 points indicates contraction. (AA)