The recent upturn in Eurozone consumer sentiment is unlikely to prevent the central bank from cutting interest rates in the near term, given the unimpressive economic data that has come out in recent months and the disappointing outlook for the economy, IHS Global Insight Chief UK and European Economist Howard Archer said.
According to the economist, the European Central Bank (ECB) will likely cut its benchmark interest rate by 25 basis points to 0.50 percent by June at the latest, with a move very possible as soon as the next week's meeting. This belief has been reinforced by the central bank's recent announcement that a rate cut could well occur if economic activity continues to falter. Flash estimates from the European Union this week showed that the consumer confidence index for the euro area climbed to a nine-month high of -22.3 in April from -23.5 in March, but remained at very low levels compared to long-term norms amid rising unemployment, muted wage growth and the tight fiscal policy.
Citing evidence from the Netherlands and Belgium, the economist pointed out that April's improvement in sentiment was likely primarily due to reduced pessimism over the economic outlook and some easing of job concerns.
According to the economist, despite the improvement in sentiment it is unlikely that Eurozone consumer spending will record any marked overall pick up in the near term at least, limiting recovery prospects.
On the positive side, however, consumer price inflation in the currency bloc moderated to a 31-month low of 1.7 percent in March, but stayed well above the annual wage growth of 1.4 percent in the fourth quarter.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.