Eurozone consumer confidence decreases for third month in a row - ING

Bert Colijn, Senior Economist at ING, suggests that the Eurozone consumers seem more concerned about the post-Brexit economy than businesses are as confidence declines for third month in a row.

Key Quotes

“Consumer confidence decreased by -0.6 points to -8.5 in the Eurozone, indicating that Europeans have lost quite some confidence this summer. While businesses are not yet signaling a weaker economic environment, consumers are clearly less confident after the Brexit-vote. This is the third decline in a row of confidence and it marks uncertainty over the current geopolitical and economic climate, but also about the personal economic situation as July’s decline in confidence indicated. With indications from latest PMI that hiring might be slowing, that concern could be valid. If this were to be the case, that would likely slow down domestic demand in the Eurozone, which has been driving the recovery over recent quarters.

The picture remains that optimism post-Brexit is premature. Although the PMI reached a 7-month high this morning, consumer confidence declines indicate that uncertainty does linger and that growth is likely to be affected by Brexit uncertainty as the process of the British exit drags along. Because of that, we remain of the opinion that growth rates are likely to decline in the second half of the year and that the ECB will announce further stimulus to counter the weakening growth environment shortly.”