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Euro area retail sales fall again

Cost-of-living impact continues to hit consumers, adding to pressure on the ECB.

6 February 2024

More gloom from the European retail sector, with sales showing a month-on-month decline of 1.1% in December, slightly worse than forecasts anticipating a 0.9% fall. As the cost-of-living impact lingers, it is clear that this is driving consumers’ behaviour ever more so.

Germany showed the steepest decline with sales 1.6% lower, France down 1.0% and Spain down 1.4%. On a year-on-year basis, Eurozone retail sales fell by 0.8%, the 15th successive month of contraction. Coupling this to the stagnant economic backdrop, with the Eurozone only just avoiding a recession in the last two quarters, it may feel that the outlook could not look any bleaker. A lot of that depends on European Central Bank policy which must swing further into focus now – restrictive monetary policy is arguably at the point where it is doing more harm than good to the patient now.

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Charles Hepworth

Investment Director
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