An EU survey shows that European economic confidence slumped in July at the fastest pace since just after the September 11 2001 attacks in the US.
Adding to growing evidence of a sharp slowdown in Europe, the European Commission's euro zone economic sentiment indicator dropped to 89.5 points in July from a revised 94.8 points the previous month.
This was largest monthly decline since October 2001 and brought the index to its lowest point since March 2003. The fall was also worse than economists had expected.
A slump in consumer confidence drove the weakness, along with negative sentiment in the construction sector which is struggling to cope with falling demand and high interest rates.
While almost all countries saw weakening economic confidence, the drop was particularly strong in Italy and Britain but Germany and France also saw sharp falls.
The European Commission's separate monthly business climate indicator for the euro zone also declined below its long-term average, dropping to a negative 0.21 points in July from a plus 0.13 in June.
