European economies and consumer sentiment improved during the last two years after the major dive when coronavirus spread initially, but after the conflict in Ukraine started and prices were hiked by major suppliers with this excuse, consumer sentiment has dived again. But will this mean another recession in the coming months?

Eurozone June Sentix Investor Confidence

• June Sentix investor confidence -15.8 points vs -20.0 expected
• May investor confidence -22.6 points

Euro area investor morale rose more than expected – the first increase since the Russia-Ukraine conflict – but the dour economic tone continues to reverberate for the time being amid supply issues and inflation. The current conditions index was seen at -7.3 in June, a slight improvement from the -10.5 reading in May.

Sentix Notes:

“As impressive as the improvement in the situation and expectations values may appear at first glance, this is unlikely to mark a turnaround. While consumers are already suffering from rising prices, many companies have been able to pass on their sharply rising costs to their customers and benefited from people rushing to buy goods and services before price increases. However, this phase looks set to finish as end consumers will have to cut back at some point, and monetary policy could become more restrictive from July.”

Eurozone May 2022 Consumer Confidence

• Eurozone May consumer confidence flash reading -21.1 points vs -21.5 expected
• April consumer confidence was was -22.0 points

This isn’t as bad as the drop in UK consumer confidence last week (40-year low) but it’s not a nice picture.

UK May Consumer Confidence

• UK May consumer confidence comes in at -40 (April -38) – falls to its lowest on record
• April consumer confidence was -38 points
• Inflation and rates both rising weighed

The records for UK consumer confidence go back to 1974. May 2022 has hit the lowest since the records began, coming in at -40 points, which matched a record low hit in April 2020 as the coronavirus pandemic swept the country.