This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
LONDON (AP) a¿¿ Disappointing retail sales figures are likely to reinforce concerns at the European Central Bank that the eurozone economic recovery is failing to gain momentum at a time when inflation is stubbornly low.
Official figures released Wednesday a¿¿ a day ahead of a highly anticipated ECB policy meeting a¿¿ showed retail sales across the 18-country eurozone suffered their biggest drop in over two and a half years in the crucial shopping month of December.
Eurostat, the EU's statistics agency, said retail sales fell 1.6 percent in December, more than offsetting the previous month's 0.9 percent rise.
That was way worse than the 0.5 percent fall anticipated in the markets and represented the biggest monthly decline since May 2011. The drop, which means retail sales in the eurozone ended the year 0.9 percent lower than where they started, was broad-based, with the region's top-two economies faring particularly badly. Germany saw a sharp 2.5 percent monthly decline while France posted a 1 percent drop.
Retail sales are a major component of economic output across the region and the December figures may raise concerns that the eurozone recovery did not accelerate in the fourth quarter as many had anticipated.
On Feb. 14, Eurostat will publish its first estimate for economic growth in the eurozone in the final three months of the year. Most economists had expected a quarterly growth rate of 0.3 percent, a modest improvement on the previous quarter's paltry 0.1 percent. But with retail sales down 0.7 percent during the October to December period, those forecasts may now be in doubt.
"We think the recovery for the economy as a whole continues, but at an anemic pace," said James Ashley, senior European economist at RBC Capital Markets.
The figures will also likely ratchet up the pressure on ECB officials to ease monetary policy further at their monthly meeting on Thursday to shore up the recovery.