German consumer confidence at five-year low

0 Comments | AFP, July, 2008

FRANKFURT (AFP) — German consumer confidence has hit its lowest level since June 2003, a leading survey showed on Monday, as benefits of increased employment and wages were "demolished" by inflation.

The confidence index compiled by the GfK institute fell to 2.1 points from 3.6 points in its previous survey, with an indicator of economic and income expectations dropping especially sharply.

"The positive momentum generated by the job market and the beneficial wage and salary increases compared with last year are consequently being demolished by inflation," GfK said.

In June, consumer prices in the biggest European economy rose by 3.3 percent in June on a 12-month basis, the biggest increase since December 1993.

"Record price increases, triggered...