Food prices, subprime fears unsettle German consumers: GfK

0 Comments | AFP, September, 2007

BERLIN (AFP) — Frothy milk prices and subprime fears sapped the morale of consumers in the eurozone's biggest economy this month, a survey by the German GfK institute found.

The leading barometer of German household confidence fell to an indexed 6.8 points from a revised level in August of 7.4, its second drop in as many months, a GfK statement said Wednesday.

"The credit crisis in the United States and rising food prices are primarily responsible for the decreased tendency to spend" by consumers, the institute added.

The collapse of the US market for high-risk mortgages, the so-called subprime market, triggered a crisis in the global banking system that tightened credit and caused many business and consumers to cut back on spending plans.

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