On Thursday (9-22-22), a monthly gauge issued from the European Commission fell to -28.8 for September. That was in excess of analysts’ predictions of a -25.5 decline and has resulted in consumer confidence in the Euro-area sinking to its lowest level on record, as EU households brace for a winter energy crunch and further acceleration of already soaring inflation.
With Russia choking gas supplies and prices soaring, economists are now saying it is almost inevitable that 19-nation currency bloc will enter into a recession in the coming months. As a result, governments across the region are rushing to develop support measures to protect the more vulnerable groups within their countries. However, similar efforts are stretching their efforts to rescue struggling companies, such as Germany’s nationalization of gas importer Uniper SE.
European Central Bank (ECB) officials, meanwhile, say they will forge ahead with interest-rate increases after an unusually large three-quarter-point increase move in September. The latest inflation data for the Euro-zone are due to be published next week and will provide crucial input for their upcoming decisions.
Isabel Schnabel, an ECB Executive Board member, said, “A looming downturn would have a dampening effect on inflation. Of course, we take this into account when calibrating monetary policy. However, the starting point of interest rates is very low, so it is clear that we need to continue to raising rates.”
Deutsch Bank is now among several EU institutions that see a much deeper recession on the horizon. Economists there are predicting an overall annual contraction of 2.2% per year.
FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
Euro-Zone Consumer Sentiment Hits Record Low on Energy Woes