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Euro-Area Economic Confidence Drops as Brexit Shock Sinks In

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Euro-area economic confidence worsened more than analysts predicted in August in a sign that the reverberations of Britain’s decision to leave the European Union may finally be reaching companies and households.

An index of industry and consumer confidence fell to 103.5 from a revised 104.5, the European Commission in Brussels said on Tuesday. That compares with a median estimate of 104.1 in a Bloomberg survey of economists, and follows an unexpected increase in July.

With European Central Bank President Mario Draghi leaving it largely to economic data to fine-tune policy expectations before next week’s Governing Council meeting, the release provides a case for more stimulus to sustain the recovery and revive inflation. The International Monetary Fund has already cut its forecast for euro-area growth next year on the back of the U.K.’s Brexit vote, and the ECB will release new projections next week.

Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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