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Crisis Throws Europe into Deepest Gloom in 15 Years

Widespread weakness across Europe as the financial crisis began taking a heavy toll on the broader economy

The worst financial crisis for generations and a looming recession drove European consumer and business confidence to a 15-year low in October, an EU survey showed on Oct. 30.

Following other recent weak data, the European Commission's eurozone economic sentiment indicator, including consumer confidence, fell to 80.4 points in October from 87.5 points in September. The drop, the sharpest one-month decline on record, brought the index to the lowest point since November 1993.

Overall confidence in the economy of the broader 27-nation European Union also fell to its lowest level since 1993, tumbling to 77.5 points in October from 84.9 in September.

The index, which covers sentiment in the industrial, services, consumer, retail and construction sectors, showed widespread weakness across Europe as the financial crisis began taking a heavy toll on the broader economy.

The European Commission's separate monthly business climate indicator for the eurozone retreated to its lowest level since 2001, dropping to a minus 1.34 points in October from minus 0.82 in September.

"It is increasingly clear that the difficulties have moved far beyond the boundaries of the financial system," said Bank of America economist Gilles Moec. "Businesses are slashing their investment and hiring plans. Households are raising their precautionary savings," he added.

Evidence of slumping economic sentiment in Europe comes on the heels of a U.S. survey on Oct. 28 that showed consumer confidence in the world's biggest economy at the lowest level on record.

Copyright Agence France-Presse, 2008

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