Consumer confidence in the eurozone fell more than expected in February, retreating from a 21 month high.
The European Commission’s measure of sentiment across the 19-country bloc fell to -6.2 points from -4.8 in January, suggesting some steam maybe coming out of the bloc’s buoyant consumer led recovery over the last two years.
Eurozone households are facing the highest rate of consumer inflation in more than four years at the start of 2017, with prices growing by 1.8 per cent in January.
The climbing cost of living, driven up by more expensive energy prices, is likely to keep a lid on consumer spending despite impressive recent falls in eurozone unemployment.
Across the EU as a whole. the consumer confidence measure slipped 0.9 points to -5.2 points.
Daniel Christen at Capital Economics said February’s loss of momentum indicated that “the consumer sector, which has been supported by previous low rates of inflation, the easing of the fiscal squeeze, and falling borrowing costs associated with the ECB’s exceptionally expansionary monetary policy, is now starting to see these effects fade”.