The good times are back in the eurozone.
A measure of consumer confidence has hit a pre-financial crisis peak this month, reaching its best level in a a decade as the continent has shrugged off populist political risks in 2017.
The European Commission’s monthly sentiment gauge gained 0.3 points to hit -3.3 in May – its best level since July 2007.
Despite the presence of higher inflation this year, the survey indicates European households are still in good form as unemployment has fallen to its lowest in eight years and growth has proven resilient.
With France having defeated populists at the ballot box and Germany’s September elections looking set to result in another victory for Angela Merkel, political uncertainty has receded significantly.
The European Central Bank also expects inflationary pressures to dampen in the months ahead.
“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”, said Howard Archer at IHS.
Chart via Bloomberg