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European confidence hits low
By Emma Ross-Thomas |
February 27, 2009, Friday
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Print Edition
Print Edition
EUROPEAN confidence in the economic outlook dropped to the lowest on record this month, making action from the European Central Bank more urgent as the recession deepens.
An index of executive and consumer sentiment in the euro region dropped to 65.4 from a revised 67.2 in January, the European Commission in Brussels said yesterday. That is the lowest since the index was first published in 1985 and below the 68.5 forecast by economists, according to the median of 27 estimates in a Bloomberg News survey. German jobless figures and other data also pointed to a worsening slump.
Billions of euros of government stimulus measures have failed to stem a decline in confidence and the ECB is under pressure to follow the United States Federal Reserve and the Bank of England in outlining what additional tools may be used to haul the economy out of the worst recession since World War II. The ECB, which has cut its benchmark rate by 2.25 percentage points since early October to 2 percent, is expected to shave another 50 basis points off on March 5.
"The indicators we're looking at for February suggest the first quarter might not be that much better than the fourth," said Nick Kounis, chief European economist at Fortis Bank in Amsterdam. "Hopefully this kind of data will make the ECB come to their conclusions about unconventional measures more quickly."
ECB Governing Council member Miguel Angel Fernandez Ordonez said the Frankfurt-based bank was "obliged" to study the potential use of unconventional policy tools.
An index of executive and consumer sentiment in the euro region dropped to 65.4 from a revised 67.2 in January, the European Commission in Brussels said yesterday. That is the lowest since the index was first published in 1985 and below the 68.5 forecast by economists, according to the median of 27 estimates in a Bloomberg News survey. German jobless figures and other data also pointed to a worsening slump.
Billions of euros of government stimulus measures have failed to stem a decline in confidence and the ECB is under pressure to follow the United States Federal Reserve and the Bank of England in outlining what additional tools may be used to haul the economy out of the worst recession since World War II. The ECB, which has cut its benchmark rate by 2.25 percentage points since early October to 2 percent, is expected to shave another 50 basis points off on March 5.
"The indicators we're looking at for February suggest the first quarter might not be that much better than the fourth," said Nick Kounis, chief European economist at Fortis Bank in Amsterdam. "Hopefully this kind of data will make the ECB come to their conclusions about unconventional measures more quickly."
ECB Governing Council member Miguel Angel Fernandez Ordonez said the Frankfurt-based bank was "obliged" to study the potential use of unconventional policy tools.
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