EU: Eurozone consumer confidence on the rise, new report shows Published: 02 June, 2006
AN “economic sentiment” report published by the European Commission on Wednesday indicates an increase in eurozone consumer confidence, the Euobserver.com reported.
Consumer confidence increased by 1.0 point in the eurozone while there was only a slight improvement of 0.1 of a point for the EU as a whole.
This is the sixth consecutive month that the Economic Sentiment Indicator (ESI) points towards a strengthening of economic confidence.
The result – 106.7 points – is the highest since April 2001.
The small rise of confidence in the EU came as a result of a one point increase in confidence among consumers and retailers, while managers’ confidence in the industry, services and construction sectors did not change in May.
For the eurozone, improved confidence of one point was registered in the industry and the services sectors, as well as among consumers.
The employment and industrial sectors are among the sectors which saw an encouraging increase in consumer confidence.
The picture in different countries is very mixed. Germany and Spain recorded a substantial improvement of 1.4 and 1.7 points respectively, while for France, the indicator improved by just 0.1 point.
In sluggish Italy, economic sentiment fell by 0.4 of a point, while a stronger deterioration of 1.4 points was registered by Poland.
The same report shows that confidence in the UK is strongly fluctuating. After an improvement of more than 10 points last month, the indicator fell by 5.9 points in May.
The reports indicate that rising inflation within the eurozone could trigger the European Central Bank (ECB) to increase its interest rates.
An increase in the eurozone inflation rate, up to 2.5% in May, would probably mean an increase in interest rates.
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