Eurozone Retail Sales Fall 0.7% Amid High Energy Costs
Eurozone retail sales volumes dropped 0.7% in September, driven by sharp declines in Germany and France and pressured by rising energy prices.
Retail sales volumes across the Eurozone fell 0.7% in September, marking the steepest decline since June 2024. Data from Eurostat shows the slump exceeded economist expectations of flat growth, with the downturn primarily driven by sharp sales drops in Germany and France. In France, consumer confidence reached a 13-year low in October following a government bond selloff and nationwide protests.
Household spending across the 21-member currency area has been suppressed by inflation reaching 4% and oil prices surging above $100 a barrel due to conflict in the Middle East. Christine Lagarde, President of the European Central Bank, noted that higher interest rates have already substantially reduced mortgage demand.
Despite a low unemployment rate of 6.5%, the European Central Bank is expected to raise interest rates in December. This would mark the third rate hike since the start of the Iran war, a move that may further constrain consumer finances and economic growth.
