An EU study has shown that euro zone consumer and business confidence slumped to a record low in February, in a fresh sign of the deepening recession.
The European Commission's economic sentiment indicator fell to 65.4 points in February, a drop of 1.8 points from January's figures and the lowest level since the survey began in January 1985.
For the 27-nation EU as a whole the fall was even greater, with the February figures down 2.2 points to 61, another record low. In both cases it was the third straight monthly fall.
The loss in confidence swept across all economic sectors except retail trade, which perked up by a single point from a confidence slump which began in 2007. Industry saw the biggest decline in sentiment, losing four points in February.
Credit figures raise rate cut hopes
The European Central Bank has said growth of credit and the money supply eased significantly in January, reinforcing expectations for a cut in interest rates next week.
Annual growth in lending to the private sector eased to 5% from 5.8% in December, an ECB spokesman said. On a monthly basis the figures were even more striking, with an increase of just 0.1%.
Meanwhile, growth in the M3 money supply indicator eased to 5.9% in January from 7.5% in December.
The money supply indicator measures cash, overnight deposits, other short-term deposits, repurchase agreements, shares and units in money market funds and debt securities with a maturity of up to two years.
A falling figure points to lower demand in the economy, which normally means inflation will ease and so allow the ECB to lower interest rates. Financial markets expect a cut of 0.5 percentage points next Thursday, which would bring the rate to an all-time low of 1.5%.
