Economic mood in euro zone sours again in April

Confidence in the euro zone’s economy fell further in April,data showed,strengthening the case for a cut in interest rates this week by the European Central Bank.

Written by Reuters | Brussels | Published: April 30, 2013 3:03:13 am

Confidence in the euro zone’s economy fell further in April,data showed,strengthening the case for a cut in interest rates this week by the European Central Bank.

The euro zone is facing a difficult road out of recession and has seen a souring of the mood among companies and consumers since March,after an optimistic start to the year was disrupted by turmoil in Cyprus and Italy. Morale in the 17-country bloc slipped 1.5 percentage points to 88.6,the European Commission said on Monday — worse than the decline to 89.3 expected by economists polled by Reuters.

“We are reaching a trough and the market is betting on the ECB cutting rates to lift the economy,” said Steen Jakobsen,chief economist at Saxo Bank. “But lower interests won’t solve the zone’s problems,we need structural reforms.” Pessimism set in even in Germany,which has performed better than most during the crisis,with economic sentiment there worsening by 2.3 points. Morale also fell in France and Italy,meaning the euro zone’s three largest economies are all witnessing a marked decline in the confidence.

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