According to Jinshi Data, Dr. Cyrus de la Rubia, chief economist of Hamburg Commercial Bank, said that the eurozone is heading for stagnation. In September, the French composite purchasing managers' index fell by the largest amount in 15 months, and new orders and backlogs of orders fell rapidly, indicating that the economy will weaken further.

The manufacturing labor market felt the pinch, with employers cutting jobs at the fastest pace since August 2020. Employment growth in the services sector slowed for four consecutive months and was almost flat. Official eurozone employment data is expected to deteriorate in the coming months.

While demographic trends should be more stable than in previous downturns, the ECB is keeping a close eye on persistently high inflation in the services sector. With both input and output price inflation slowing, a deepening manufacturing recession and near-stagnation in the services sector, the possibility of another rate cut in October is on the table.