Eurozone investors grew gloomier in September as a gauge of investor confidence worsened to the lowest level since May 2020, signalling that recession fears are increasing, survey data from the behavioural research institute Sentix showed on Monday.
The eurozone Sentix Investor Confidence index came in at -31.8, down from -25.2 in August compared with expectations of -27.5. The index broke its recovery streak amid mounting recession fears. An expectations sub-index plunged to -37.0, which is the lowest since the financial crisis in 2008. “It is very likely that a significant recessionary trend has already set in,” said Sentix in a statement.
Meanwhile, construction activity in the UK fell for the second month in a row in August according to the forward-looking S&P Global/CIPS UK Construction Purchasing Managers’ Index. The August reading showed muted activity after an even gloomier July. The index came in at 49.2 in August, after a reading of 48.9 the previous month. Another figure below 50, though higher than the previous month, indicates the sector contracted during the month.
Concerns about wider economic prospects led to a drop in business confidence, slower job creation and a decline in firms’ purchasing activity resulting from concerns about economic prospects. Having said this, on Tuesday, new UK Prime Minister Liz Truss showed a strong resolve in her opening speech to revive the economy.
Finally, in Australia, the Reserve Bank of Australia (RBA) on Tuesday announced it will hike its official interest rates for a record fifth month in a row as it endeavours to bring inflation under control. The RBA lifted rates by a half point to 2.35 per cent, as expected by analysts. The Australian dollar weakened following the move. RBA Governor Philip Lowe said this would be far from the last rate rise during this monetary policy tightening cycle, with inflation in 2022 expected to hit a new 32-year high as consumers kept on spending.
This report was compiled by Bank of Valletta for general information purposes only.