Eurozone Consumer Sentiment Knocked by Surging Energy Prices — Update

By Ed Frankl

Sentiment among consumers in the eurozone inched lower this month, damaged by rebounding energy prices after military action in the Middle East escalated.

The European Commission's flash consumer-confidence indicator for the 21-nation currency area fell 1.0 point to minus 16.5 in September. A consensus of economists polled last week by The Wall Street Journal expected it to decline less steeply to minus 16.0.

Confidence had edged higher over the past few months, reaching in August its highest point since February, before the outbreak of the war in Iran that sharply weakened consumer sentiment.

"Consumer confidence veered away from its long-term average again, after four months of recovery," the Commission said.

Now September's decline in the confidence barometer shows households' moods have soured again after fuel prices have climbed around 6% this month, alongside higher utility bills and lower equity prices, Capital Economics' Jack Allen-Reynolds said in a note to clients.

"But as long as oil and natural gas prices don't rise a lot further, we think that household consumption will continue to increase," he added.

The consumer sentiment gauge comes ahead of a purchasing managers' index release due Wednesday, which will encompass businesses' responses to higher energy prices as well as the European Central Bank's interest-rate hike earlier this month.

"Upside surprises in the September PMIs and [for inflation] likely would prompt the ECB to follow through with a hike next month, but we still think December is the more likely timing for the bank's next move," said Claus Vistesen, economist at Pantheon Macroeconomics.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

September 22, 2026 12:14 ET (16:14 GMT)