European Confidence Declines, Inflation Accelerates

Confidence among European executives and consumers fell more than economists forecast as inflation accelerated and U.S. growth slowed.

An index of sentiment in the euro area dropped to 101.7 this month, the lowest since January 2006, from a revised 103.4 in December, the European Commission in Brussels said today. The inflation rate rose to 3.2 percent, the highest in 14 years, a separate report showed.

Sales growth at European companies including retailers and carmakers may slow this year as the global economy heads for its weakest expansion since 2003, according to International Monetary Fund forecasts. While European Central Bank officials say the U.S. slowdown will affect euro-area growth, inflation above the ECB's 2 percent ceiling has restrained them from following counterparts in the U.K. and the U.S. in cutting interest rates.

European Confidence Declines, Inflation Accelerates, Bloomberg
1/31/2008 6:32:47 AM