ECB Stuck Between A Rock & A Hard Place

Soaring consumer prices and the prospect of energy rationing this coming winter have depressed consumer confidence in the Eurozone. No wonder that the volume of retail sale in the region fell 1.2% m/m and 3.7% y/y during June, suggesting that the risks of a recession in the Eurozone are increasing (chart below).

Real retail sales declined 2.6% for non-food products, 1.1% for automotive fuels, and 0.4% for food, drinks and tobacco in June compared with the previous month.