Grim data puts fundamentals in focus

The challenges facing European policymakers as they attempt to resolve the sovereign debt crisis were underscored by grim economic data yesterday, with Spanish unemployment spiralling to a 15-year high and French consumer spending falling by more than had been forecast.

Spanish unemployment rose to21.5 per cent between July andSeptember, up from 20.9 per centin the preceding three-month period, the country's National StatisticsInstitute said, highlighting the sorry state of affairs existing in the largest of the troubled southern European economies.

With nearly five million out of work, Spain has suffered both pressure from the markets as its borrowing costs climb, and credit-rating downgrades as analysts turn their attention to its debt burden.

Supplementing the news from Madrid were figures from France, which showed consumer spending in Europe's second-largest economy had dipped at a monthly rate of 0.5 per cent in September. It was a disappointing result, as economists had expected spending to remain flat after rising by 0.2 per cent in August.

There were also gross domestic product (GDP) figures from Belgium, whose economy stagnated over the third quarter. Belgium's GDP between July and September was flat compared to the second quarter.

Economists had been predicting a 0.2 per cent rise on the quarter.