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Euro area confidence rebounds in July as inflation expectations fall
July consumer and economic confidence rose, while consumer inflation expectations eased to the softest level since February.
Forexlive reports that euro area economic sentiment continued to improve in July, with the July final consumer confidence reading unchanged versus the preliminary estimate at minus 15.9, compared with minus 17.6 previously. The same release showed July economic confidence at 96.9, versus 96.0 expected, and services confidence at 4.7, above the 3.8 forecast.
In addition, the outlet said industrial confidence improved to minus 6.1 from minus 7.7 previously, and consumer confidence was supported by the final estimates. Forexlive also highlighted a further decline in the consumer inflation expectations reading to 30.3, down from 34.0 previously, marking the softest level since February.
The report frames the data as evidence of a continuing rebound in sentiment, even as conditions remain “subdued” and euro area economic headwinds persist into the second half of the year. Forexlive points to uncertainty from the US-Iran conflict and rising energy prices as potential risks.
Finally, the outlet said the ECB may still need to raise interest rates to counter rising price pressures, even as stagflation risks appear to have eased amid signs of added economic resilience in Q2. Forexlive added that the Middle East situation could keep influencing the outlook into the autumn and winter months.