Euro zone consumer spending remained subdued in July, data showed today.
The European Union's statistics office said retail sales in the 12 countries using the euro fell 0.5 per cent in July from June against expectations of only a 0.3 per cent decline.
Compared with July 2004, retail sales were flat, while market consensus was for a 0.9 per cent rise.
Consumers have less money to spend because of high oil prices, which have been steadily rising to all-time highs since the start of the year. Persistently high unemployment close to 9 per cent does not encourage consumer spending, either.
"This is just further corroboration that euro zone consumers are still on the ropes and continue to suffer," said David Brown, chief European economist at Bear Stearns.
"I don't think you can foresee any early turnaround in confidence and spending until we see some major improvement in the unemployment picture and that will grind on, improving very very slowly," he said.
