• Europe’s economy just showed further signs that it was stuttering after confidence hit a four and a half year low.
  • September’s results of the Economic Sentiment Indicator fell to 101.7 from 103.1 in August – a sign that various sectors of the continent’s economy are feeling the heat from a slowdown.
  • Capital Economics said that “industrial confidence fell sharply,” adding that it suggested, “the downturn in the sector has further to run.”
  • Europe’s economy has been struggling recently, as industrial production and exports both saw declines due to uncertainty over the trade war and Brexit.
  • Recently the European Central Bank delivered a rate cut to try and stimulate the economy.
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Europe’s stuttering economy just took another blow, as confidence hit a four and a half year low.

The index, collected by the European Commission, a branch of the EU, surveys confidence across five different sectors across the EU: manufacturing, construction, services, consumer and retail trade.

Jessica Hinds, European economist at Capital Economics, said that drop in the Economic Sentiment indicator to 101.7 in September from 103.1 in August, “marked a resumption of the steady decline in the index since the start of 2018 and took the index to its lowest level in four and a half years.”

In terms of each industry, services and consumer sentiment did edge up marginally according to Hinds, however, she said that “industrial confidence [manufacturing] fell sharply, suggesting that the downturn in the sector has further to run.”

Industrial production across Europe has struggled in the last year, with Germany especially being affected - earlier this week Germany's composite purchasing managers' index sank to its lowest level since October 2012, an indicator that manufacturing would continue to weaken.

"At the national level, economic sentiment was broadly unchanged again in France but deteriorated in Spain, Italy and Germany," said Hinds, adding "the decline in the latter echoes the message from other surveys that the region's largest economy is continuing to struggle."

With the EU's economy struggling recently due to a variety of reasons including the trade war, Brexit and a global slowdown, the European Central bank delivered a rate cut earlier this month, bringing interest rates down to -0.5% from -0.4%

However, with rates so low already the impact of the rate cut looks like it has yet to be felt. Hinds said that these results "strengthens the case for further policy support next year."