Euro zone sentiment at 2-year low in November

Tue Nov 29, 2011 7:31am EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Robin Emmott

BRUSSELS (Reuters) - Worries about the euro zone's debt crisis worsened in November and dragged the European Commission's economic and consumer sentiment index to a two-year low, heightening the risks of a recession in Europe.

Business managers and consumers turned more pessimistic across almost all sectors of the euro zone's economy and the Commission's monthly economic sentiment index slipped to 93.7, its lowest since late 2009, and down from 94.8 in October.

Economists polled by Reuters had expected a figure of 94.0.

Adding to the depth of concern about the debt crisis and a slowing economy shown by last week's purchasing managers' surveys, the Commission's business climate indicator fell for a ninth month.

The index slid to -0.44 points from -0.19 and notched up a third month below zero. November's reading was the lowest since February 2010.

"The euro zone's economy seems to be heading into a fairly deep recession," said Jennifer McKeown, an economist at Capital Economics in London. "Public finance problems, the lack of reform and in some cases the risk of default are all issues and this trend in weakening confidence is likely to become worse."

European leaders have so far been unable to rally round a convincing strategy to solve the two-year crisis and bond yields are at or close to unaffordable levels in Spain and Italy.

Neither new technocratic governments in Athens and Rome, nor plans to amplify the power of the bloc's rescue fund, have been able to calm investor concerns about a Greek default or a break-up of the 17-nation currency area.   Continued...