Eurozone Confidence Falls While UK Sentiment Rebounds in August

Consumer sentiment in the euro area deteriorated in August, with the European Commission’s flash consumer-confidence indicator falling to –15.5 from –14.7 in July. The drop was larger than economists’ expectations, which centred on roughly –14.8, leaving the gauge well below its long-term average. Across the broader European Union the index slipped 0.3 point to –14.8, the Commission said, underscoring still-fragile household morale even after inflation has eased from last year’s peaks. In contrast, UK consumer confidence improved for a second month. Research group GfK reported its August index at –17, up from –19 in July and stronger than the consensus forecast of about –19 to –20. Although still firmly negative, the reading is the highest since February and suggests British households are becoming less pessimistic as wage growth outpaces prices. The diverging readings highlight uneven recovery prospects across Europe. While UK sentiment inches higher on receding inflation pressures, the euro-area decline points to headwinds from higher borrowing costs and slowing labour-market momentum ahead of next month’s European Central Bank meeting.