The euro-zone’s consumer sector appears to have had another poor quarter in Q3. Retail sales volumes were flat in August, while timelier national data point to a contraction in sales in September. Combined with data on car registrations, that suggests that euro-zone consumer spending probably rose by a paltry 0.2% in Q3, the same as in Q2. The recent weakness of retail sales appears to be partly down to rising inflation – in August the retail sales deflator was positive for the first time in 36 months. With inflation set to rise further due to energy price effects, consumer spending growth is likely to remain weak.
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