An EU survey has shown that consumer and business confidence in the euro zone economy fell for the sixth consecutive month in August.
The decline resulted from a 'broad-based deterioration in sentiment across the sectors', the European Commission said. The biggest falls were in services, retail and among consumers, with only the construction sector recording an improvement.
The Economic Sentiment Indicator (ESI) fell by 4.7 points from July to 98.3 in the euro zone. The EU figure fell by five points to 97.3.
'In both regions consumers were pessimistic about the future general economic situation and expressed higher unemployment fears,' the commission said.
Confidence in industry remains above its long-term average but worsened in the euro zone and the EU 'on the back of a drop in managers' appraisal of the level of order books and production expectations'. The Commission said firms were more pessimistic about their export order books.
Germany, Europe's top economy, recorded the strongest fall in economic sentiment among among euro zone nations, from 112.7 to 107.
S&P thinks Europe will escape double-dip
Credit rating agency Standard & Poor's has said the euro zone should escape a double-dip recession, despite sluggish growth this year.
The ratings agency lowered its forecast for euro zone growth to 1.7% this year from a previous 1.9%, and to 1.5% next year.
'We see several sources of continuing growth over the next 18 months, including still buoyant demand from emerging markets and an ongoing recovery, albeit sluggish, in corporate capital spending,' S&P said.
The ratings body now forecasts that the European Central Bank will keep its key lending rate on hold at 1.5% until spring next year, instead of hiking rates to 2% by the end of this year as it previously forecast.
