Italy business and consumer morale drop sharply before new government takes charge

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ROME, Sept 28 (Reuters) – Morale amongst Italian businesses and consumers fell sharply in September amid sky-high energy costs as parties campaigned for the election that returned a right-wing government on Sunday.

National statistics institute ISTAT reported on Wednesday that its manufacturing confidence index fell to 101.3 in September from a downwardly revised 104.0 in August

The data was below a median forecast of 102.1 in a Reuters survey of 10 analysts and was the lowest reading since February last year.

ISTAT’s composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, dropped to 105.2 in September, down four points from August’s reading of 109.2.

Shoppers were equally downbeat ahead of the election, with the consumer morale index falling to 94.8 from 98.3 in August, slightly short of a median forecast of 95.1 in Reuters’ poll.

Italian gross domestic product rose a stronger-than-expected 1.1% in the second quarter from the previous three months, but most analysts expect a sharp slowdown during the rest of the year, as energy-driven inflation hits companies and households.

((Reporting by Gavin Jones, gavin.jones@thomsonreuters.com))

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