Finally found the solution here:
This code now fixed my issues:
void APlayerSpaceship::handleSteerInput(const FInputActionValue& value)
{
const auto input = value.Get<FVector2D>();
const auto currentQuat = GetActorQuat();
const auto currentRotation = GetActorRotation();
const auto newQuat =
FRotator(0, input.X * steeringSpeed, 0).Quaternion() *
currentQuat *
FRotator(input.Y * steeringSpeed, 0, 0).Quaternion();
SetActorRotation(newQuat);
}```