Cost-of-living impact continues to hit consumers, adding to pressure on the ECB.
6 February 2024
More gloom from the European retail sector, with sales showing a month-on-month decline of 1.1% in December, slightly worse than forecasts anticipating a 0.9% fall. As the cost-of-living impact lingers, it is clear that this is driving consumers’ behaviour ever more so.
Germany showed the steepest decline with sales 1.6% lower, France down 1.0% and Spain down 1.4%. On a year-on-year basis, Eurozone retail sales fell by 0.8%, the 15th successive month of contraction. Coupling this to the stagnant economic backdrop, with the Eurozone only just avoiding a recession in the last two quarters, it may feel that the outlook could not look any bleaker. A lot of that depends on European Central Bank policy which must swing further into focus now – restrictive monetary policy is arguably at the point where it is doing more harm than good to the patient now.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.