Growing signs of gloom across the eurozone

 

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The Independent Online

The mood among businesses and consumers across countries which use the euro darkened this month, cementing fears of slower economic growth in months ahead.

A monthly European Commission survey, published yesterday, showed that optimism had declined across all sectors in the 17-country bloc.

The gloom was reflected in the reading for economic sentiment, seen as a guide to future trends, which fell to 98.3 for August, down from a revised reading of 103 for July. The slump was sharper than expected, with economists anticipating a reading of 100.5.

The survey also showed that while confidence in industry remains above the long-term average, it fell by 3.8 points. At minus 2.9, the index for industry moved back into negative territory for the first time since September last year. The index for services fell by 4.3 points to 3.7, as did the index measuring confidence among consumers in eurozone countries, which was 5.3 points down at minus 16.5.

Howard Archer, economist at IHS Global Insight, attributed the gloomy mood to the coming together of a combination of factors, including the sovereign debt crisis engulfing the countries on the continent's southern periphery.

"It is evident that both businesses and consumers are very worried by the slowdown in domestic economic activity, heightened financial market turmoil, ongoing serious concerns about the eurozone sovereign debt situation and increased fears over the health of the global economy," he said.

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