Euro area consumer confidence fell by 12 index points between February and April 2026 following the Middle East war, comparable to the 15-point drop after Russia’s Ukraine invasion. While confidence partially rebounded by 3.5 points in May-June, the analysis links this decline to shifts in consumer behavior rather than temporary sentiment shocks. Nominal consumption growth slowed to 2.5% year-on-year in April 2026, with discretionary spending categories like travel and recreation declining most. Energy costs rose due to higher transport expenses, while necessities like housing and food remained resilient. Higher-income households adjusted more by postponing non-essential purchases, whereas lower-income groups cut back on durable goods and dining out. Around 40% of respondents expected no income catch-up from persistent inflation, risking prolonged spending cuts. Confidence remains below pre-war levels, with uncertainty surrounding the economic outlook.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
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