The European Central Bank has expressed concern about a possible deterioration in consumer confidence in the euro zone at the beginning of the year following the pick-up in household spending at the end of 2004.

'Available indicators of household spending give mixed signals on whether the strengthening in private consumption growth recorded at the end of 2004 was sustained in the first quarter of 2005,' the ECB wrote in its April monthly bulletin published today.

The bank pointed out that new car registrations had fallen in the first two months of 2005.

On the whole, the ECB insisted that the conditions remained in place for moderate economic growth to continue, but it added that persistently high oil prices were a risk to growth.

On Wednesday, the International Monetary Fund had also expressed concern about the strength of economic recovery in the euro area and lowered its 2005 growth forecast for the single currency area to 1.6%.