European consumers are the most confident since 2007 as steady growth continues

 
Jasper Jolly
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Emmanuel Macron's victory boosted political sentiment across Europe (Source: Getty)

Consumer confidence in the Eurozone rose to its highest point since before the financial crisis in May with the outlook for European growth firming.

The European Commission’s measure of confidence rose by 0.3 points to reach a negative level of 3.3 per cent.

That meant it edged above its previous peak in early 2015, before a reoccurrence of the the Greek debt crisis. The previous high point was reached in July 2007, before the first signs of the global financial crisis roiled the world economy.

Read more: Whisper it, but the European economy is in surprisingly good shape

The increase in confidence comes as the world economy starts to find a firmer footing, with global growth expected to accelerate to 3.5 per cent this year, according to the International Monetary Fund (IMF).

While euro area growth is still expected to be relatively sluggish, at 1.7 per cent this year, the single currency bloc has been boosted by a succession of political events seen as positive for growth.

Chief among those was the election of Emmanuel Macron as French President, defeating the anti-euro Marine Le Pen at the start of the month.

Consumer sentiment has also benefited from unemployment falling to its lowest rate since 2009, at 9.5 per cent.

Read more: ECB is less likely to loosen policy further, but cautious on tightening

Inflationary pressure has also started to pick up, indicating the economy may start to be finally entering growth mode. Core inflation, which strips out the effects of volatile oil and food price increases on consumers, rose to 1.2 per cent in April, up from only 0.7 per cent in March.

Howard Archer, chief UK and Eurozone economist at IHS Markit, said: “Improved job markets and recent largely healthy economic news are clearly buoying consumers – even though they do have concerns over recent markedly higher inflation squeezing purchasing power.

“A dilution of political uncertainties may also be helping confidence.”