Eurozone Sentiment Weakens In October As Price Expectations Tick Up

By Bert Colijn of ING Think

Economic and Financial Analysis • Oct 29, 2026 at 8:40 AM EDT

Eurozone economic sentiment fell to 96.9 in October as service sector demand softened and price expectations ticked higher.

Eurozone industry remains upbeat despite weaker production data, but the service sector experienced sluggish demand at the start of the fourth quarter. With energy prices still on the rise, selling price expectations ticked up again.

The Economic Sentiment Indicator for the eurozone fell from 97.5 to 96.9 in October, with employment expectations ticking up slightly. Sentiment reached its weakest level since June.

For manufacturing, production has shrunk in recent months. But surveys tell a much more upbeat story. Industrial sentiment improved in October; businesses indicated that recent production was up, new orders are improving and that they are more likely to hire than last month. The question is when stronger positivity is going to translate into stronger production figures, especially with continued high energy prices weighing on energy-intensive sectors.

The service sector was more downbeat, but not to a dramatic degree either. The eurozone economy still seems to be trucking along at a decent pace. While businesses in the service sector were more downbeat on demand in October, they did become slightly more optimistic about the months ahead.

Consumers did express more worry, especially about personal finances, and seem to be shying further away from major purchases. Recent high inflation and the general economic environment remain the main culprits for consumer caution.

Importantly for the European Central Bank this afternoon, both industry and services expect stronger price increases in the months ahead. This is especially the case for goods, which, admittedly, make up a smaller part of the total inflation basket than services. There isn't any immediate need to hike, of course, but the ECB will remain on high alert to see to what degree second-round effects will ultimately materialise.

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