Eurozone business activity increased last month due to weakening demand in the dominant services industry, signaling a recession in the 20-country currency union.

Official figures showed the economy contracted 0.1% in the third quarter, and the final Composite Purchasing Managers’ Index (PMI) for October showed the union entered the last quarter of 2023 on the back foot.

Capital Economics’ Adrian Prettejohn forecasts that euro-zone GDP will contract again in Q4.

The new business index for services was at its lowest since early 2021, with indebted customers hoarding money due to price hikes and higher borrowing expenses.