Monday 5 August 2019 2:49 pm

Investor confidence in Eurozone hits five-year low

Eurozone investors were at their gloomiest since October 2014 in August, according to a survey from finance data firm Sentix, which called a German recession “inevitable”.

Read more: Eurozone economy slows as German weakness continues

Sentix’s economic index of investor confidence fell by 7.9 points to minus 13.7 in August, significantly below the minus 7.7 analysts had predicted.

Investors’ views of economic expectations fell to minus 20, the lowest score since August 2012, from minus 13 in July.

Sentix noted that the last time investors’ expectations were so low, European Central Bank (ECB) president Mario Draghi felt compelled to say he would do “whatever it takes” to bolster the Eurozone.

In Germany, traditionally the powerhouse of the area’s economy, the overall sentiment index fell to minus 13.7 from minus 4.7 in July. This was its lowest score in ten years. “A recession is inevitable,” Sentix said.

The Eurozone economy has struggled in 2019 due to trade tensions, a global slowdown, weak demand from China and Brexit.

A closely-watched survey from data provider IHS Markit showed today that Growth in the Eurozone economy softened in July as German output fell to a six-year low and the manufacturing sector continued to suffer.

The ECB said at its most recent meeting that it was preparing stimulus measures to boost the economy and the US Federal Reserve cut interest rates by 0.25 percentage points last week.

“The measures announced by the central banks have not led to a change in economic expectations,” said Patrick Hussy, managing director of Sentix.

Read more: Eurozone growth and inflation slow in second quarter with ECB poised to act

“Even for the USA, where the situation remains stable, expectations are falling dramatically. Trump has once again poured oil into the fire with its renewed Chinese tariffs.”