Confidence evaporates among Europe’s crisis-hit consumers

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Consumer confidence in Europe has suffered a record monthly fall to its lowest level since the 2009 financial crisis, underlining the heavy impact of the economic and financial turmoil caused by coronavirus.The European Commission’s consumer confidence indicator for the EU fell 11.6 points to minus 22, while for the eurozone it fell 11.1 points to minus 22.7, according to a monthly survey conducted this month that was published on Wednesday. The evaporation of consumer confidence underlines how the crisis has put millions of people’s jobs at risk, after companies across Europe were forced to close to comply with government lockdowns in a bid to slow the spread of the pandemic.The survey adds to pressure on EU leaders ahead of their summit on Thursday, when they will discuss potential joint fiscal responses to the disease. It also raises the stakes for the European Central Bank before it meets next week to discuss whether to further loosen monetary policy.The commission said it had not been able to carry out this month’s survey in Italy, which had been hit hardest by the virus and had the most severe lockdown. As a result, the figures may underestimate the overall fall in consumer confidence.Melanie Debono, Europe economist at Capital Economics, predicted that consumer spending in the region had fallen by 20 to 30 per cent since mid-March. While it is likely to recover once lockdowns are lifted later this year, she still expects it to fall by 12 per cent over the whole year — compared with a drop of only 1 per cent in 2009, at the time of the financial crisis.

 

Source: https://www.ft.com/content/636c2abc-00e1-434d-8691-9299cb25b4a0

 

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