Pessimism in EU 15

Business and consumer confidence plunged in the 15 countries using the euro in July, hitting the lowest level in more than five years, the European Commission said.

Consumer confidence worsened again in
July, the EU survey showed. This hits household spending, once the
main engine of the euro-zone's economic expansion as people shell out
for fewer big items or luxury goods as they spend more on gas and
groceries.

Combined with gloom from business
sectors – construction, industry, retail and services – the EU's
economic sentiment indicator fell to 89.5 in July, the lowest level
since March 2003 and the sharpest month-to-month slip since October
2001. Records started in 1990.

A separate EU survey of industry
managers, the euro-zone business climate indicator, also dropped in
July to minus 0.21.

"The low level of the indicator
suggests that economic activity in industry, which saw a fall in
production in May, remains subdued," the EU said. Managers
expected less production, lower order books and fewer exports in
coming months.