Euro zone economic confidence falls; recovery may slow down

Warsaw, June 29: Euro zone economic confidence weakened in June in anticipation of a UK referendum that unexpectedly saw Britons choosing to leave the European Union.

An index of executive and consumer sentiment fell to 104.4 from a revised 104.6 in May, the European Commission in Brussels said on Wednesday. Data were collected before the British vote on June 23. Economists surveyed by Bloomberg predicted the gauge would remain unchanged.

The UK’s shock decision to quit its membership in the 28nation bloc triggered a market rout similar to the one observed during the 2008-2009 financial crisis and raised concerns that an already Washington, June 29: US consumerspendingrosefora second straight month in Mayonincreaseddemandfor automobilesandothergoods, but there are fears Britain’s vote to leave the European Union could hurt confidence and prompt households to cut back on consumption.

The Commerce Department said consumer spending, which accounts for over two-thirds of US economic activity, increased 0.4% last month, hinting an acceleration in economic growth in the second quarter. Reuters fragile euro zone recovery could be derailed. European Central Bank President Mario Draghi told European leaders on Tuesday that he leans towards more pessimistic forecasts of how much growth in the 19-nation region will suffer in the wake of Britain’s vote to leave.

According to Eurostat, sentiment in services, retailing and construction deteriorated in June, with consumers also turning more negative. Confidence improved in the industrial sector and financial services.

German Chancellor Angela Merkel has said the EU remains one of the biggest economic global powers and is “strong enough” to withstand the UK’s exit. Bloomberg