2017.05.2206:55:00UTC+00Eurozone Consumers Likely To Keep Spending At Decent Rate

Eurozone consumers are set to keep spending at a decent rate despite higher inflation eating into their purchasing power, IHS Markit economist Howard Archer said.

Official data from the European Commission revealed on Friday that the consumer confidence index rose to -3.3 in May from -3.6 in April, marking the strongest level since July 2007.

Archer noted that the ongoing healthy economic news and a dilution of political uncertainties with Macron's decisive win in the French presidential election supported sentiment.

The rise in April was largely due to improved views over the economic situation and reduced unemployment concerns.

May's further rise in consumer confidence fuels hope that Eurozone consumers will be prepared to keep spending at a decent rate despite higher inflation eating into their purchasing power, Archer said.

"However, the rise in confidence is not a guarantee that consumers will spend strongly - and a downside risk to the Eurozone growth stems from the possibility that consumers will become more cautious over spending due to the dilution of purchasing power coming from higher inflation," the economist predicted.