Eurozone consumer confidence falls again

THE eurozone’s consumer confidence index fell again in November and now stands a full five points below its peak at the start of the year, signalling concerns over sentiment amid falling output indicators in the bloc.

The European Commission said yesterday: “Consumer confidence decreased markedly (-1.2) due to a deterioration of all its components, ie, consumers’ unemployment and savings expectations and their views on their future financial situation and the future general economic situation — the decrease in the latter was particularly strong.”

Bucking the weaker trend, the survey showed that consumers in Germany were becoming more confident in their own finances.

The reading there was the strongest in the eurozone, which signals the potential for a pickup in spending in Europe’s largest economy.

Inside the eurozone, Italy saw its reading fall back to levels not seen since July last year. The bloc’s third largest economy is flatlining and Rome is in a standoff with the EU over its budget.

Economic consultancy Capital Economics said that falling oil prices should feed through into consumers’ wallets.

“There is already evidence that the tightness of the labour market is putting some upward pressure on wage growth,” it said.

The broader economic sentiment indicator which covers both consumers and business fell less than had been expected from 109.7 to 109.5, which Capital Economics said was consistent with solid GDP growth that would encourage the European Central Bank to end its bond purchasing programme in December.

The worst performing country in the EU overall was the UK, where the index fell 3.1 points due to the uncertainty surrounding Brexit.

A report from the UK Government earlier this week said the economy would be worse off under any Brexit scenario than it would have been staying in the EU, with forecasts that a hard Brexit would cut potential economic growth by 8%.

The Bank of England has predicted that house prices could fall by 30%.

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