(RTTNews) - Tuesday, a closely watched survey found that consumer confidence in Germany deteriorated more than expected due to heightened inflationary pressures. In the UK, mortgage approvals declined to an 11-year low. In Switzerland, the UBS consumption indicator continued to decline in May.

Eurozone

The latest survey conducted by the GfK Group showed that the German consumer confidence index for July deteriorated to 3.9 points, down from a revised reading of 4.7 points in June and 4.6 points expected by economists. The reading for June was revised down from the 4.9 points reported earlier.

The survey found, increasing fear of inflation, along with the persistent financial market crisis, a strong euro and a weaker global economy mean that consumers were not very upbeat in their assessment of future economic growth. Repeated announcements of new record gasoline and diesel prices added fears of a loss of purchasing power.

The French statistical office INSEE said households’ consumption expenditure increased 2% month-on-month in May, following a 0.9% fall in April. Economists had expected a monthly growth of just 0.7%. Separately, the statistical office reported that the business confidence indicator remained unchanged at 102 in June from May. The consensus forecast was for the index to decline to 101.

Housing starts in France decreased 21.6% during three months ended May, while economists expected a fall of 18.2%. In three months to April, housing starts recorded an annual decline of 18.8%. Further, housing permits showed a fall of 19.9%, following a16.3% decrease in three months to April.

The latest report from the research institute ISAE showed that Italy’s consumer confidence indicator declined to 100 in June from 103.2 in May. Economists had expected the index to record a reading of 102. The sub-index measuring consumers’ perception of the overall economic situation decreased to 82.3 from 84.7 in May.

According to the Statistics Finland, unemployment rate in the nation increased to 8.8% in May from 6.2% in April and 8.5% recorded in the previous year. Economists had expected the rate to increase to 7.5%.

The Central Statistics Office reported that the Irish trade surplus in April increased to EUR2.34 billion from EUR2.14 billion in March.

Rest of Europe

The number of mortgages approved in the UK for house purchases fell 56% year-on-year to 27,968 in May, the British Bankers’ Association, or BBA reported. This is the lowest in 11 years. According to BBA, gross mortgage lending totaled GBP16.2 billion, down 15.9% year-on-year. At the same time, loans for all mortgages fell 31.4% to GBP14.3 billion and that for house purchases alone declined 56.8% to GBP4.3 billion.

The Swiss UBS consumption indicator continued to decline in May with the reading falling to 1.91 from April’s revised reading of 2.16. In April, the indicator decreased from 2.25 recorded in March. However, it still remains above its long-term average of 1.50. At its current level, the UBS said that the consumption indicator signals consumer spending remains strong in Switzerland. At the same time, the UBS noted that the recent acceleration in inflation dampened the outlook to some extent. However, economists at UBS expect inflation rates to subside somewhat as the year progresses. On this ground, the UBS noted that it expects overall real growth in private consumption to reach 1.8% for the current year.

As widely expected, the National Bank of Slovakia kept its interest rates on hold for the 14th month in a row. The Bank Board decided to maintain its overnight sterilization rate at 2.25% and overnight refinancing rate at 5.75%. The two-week repo tender limit rate is retained at 4.25%.

Elsewhere, the Central Statistical Office revealed that Polish retail sales grew 14.9% year-on-year in May, slower than 17.6% in April. Economists had expected retail sales growth to ease to 14%. Compared with April, sales dropped 1.9% in May. Separately, the statistical office said the unemployment rate stood at 10% in May, fell from 10.5% reported in April.

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