Economic confidence dropped to 106.2 for January, a level not since since the end of 2016, from 107.4 recorded for December, as the eurozone struggles against political uncertainty from Brexit and the repercussions of a trade war between China and the United States. Gloom across the European Commission’s economic sentiment index spread worst in industry, services, consumers and business climate, while the mood improved for retail trade and construction. France, the second-biggest economy in the euro area, saw consumer confidence levels rebound in January from a slump in the previous month, though they remained well below average. While in Italy, manufacturing confidence index slipped in January to its lowest reading since September 2016.
However, consumer confidence rose compared to the month before.
German consumer sentiment picked up heading into February but consumers became more pessimistic about the economy.
Consumer sentiment increased from the month before, while consumers’ economic expectations dropped to the lowest level in almost two years.
This week saw European Central Bank chief Mario Draghi admit the eurozone economy has continued to perform weaker than expected as he blamed global uncertainty for dragging down growth.
Mr Draghi told the European Parliament’s committee on economic affairs in Brussels: “Over the past few months, incoming information has continued to be weaker than expected on account of softer external demand and some country and sector-specific factors.
“The persistence of uncertainties in particular relating to geopolitical factors and the threat of protectionism is weighing on economic sentiment.”
The bank left guidance and interest rates unchanged at its meeting last week, with the ECB still expecting to keep interest rates at record lows “through” the summer.
Back in December, the ECB ended a landmark €2.6trillion ($3trillion) bond purchase scheme just weeks ago.
The four-year-long quantitive easing scheme programme had seen the ECB top up eurozone cash supply by purchasing millions of euros worth of assets each month.
The amount of assets bought each month was reduced in September to €15billion from €30billion as the scheme began to wind down.
Meanwhile, survey data showed on Thursday business activity across the eurozone expanded at the slowest pace since 2013 at the start of this year.