Published by Global Banking & Finance Review®
Posted on March 6, 2025
2 min readLast updated: January 25, 2026
Add as preferred source on GoogleEuro zone retail sales fell by 0.3% in January, marking the fourth month of contraction, with weak consumption likely prompting ECB rate cuts.
FRANKFURT (Reuters) - Euro zone retail sales unexpectedly dipped in January, adding to signs that a long-predicted consumption-led recovery is not yet on the horizon, fresh data from Eurostat showed on Thursday.
Retail sales in the 20 nations sharing the euro currency dipped by 0.3% on the month, confounding expectations for a 0.1% rise, as non-food products and fuel sales both fell.
It was the fourth straight month of contraction or zero growth, and retail figures have been trending down for the past half year.
Consumption was widely expected to take off in the second half of last year as real wages finally caught up to levels before the inflation surge of 2022-2023.
But households are still choosing to save up their cash, worried that the relentless flow of negative news from trade tensions to Russia's war in Ukraine and an industrial recession could drag the bloc into recession and lead to massive job losses.
Those fears have been proven wrong so far as employment continues to rise to record highs but hours worked are falling and order levels in manufacturing remain low, denting confidence.
Among the bloc's biggest countries, Germany reported a small rise in retail sales, but France and Italy both recorded drops.
Retail sales rose by 1.5% compared with a year earlier, a slowdown from 2.2% a month earlier and also below expectations for 1.9%.
Weak consumption is a key reason the European Central Bank is all but certain to cut interest rates once again on Thursday and keep the door open to more monetary policy easing.
(Reporting by Balazs Koranyi; Editing by Hugh Lawson)
Euro zone retail sales unexpectedly dipped by 0.3% in January, marking the fourth consecutive month of contraction or zero growth.
Households are choosing to save cash due to concerns over negative news such as trade tensions and the ongoing war in Ukraine, despite rising employment levels.
Weak consumption is a key reason the European Central Bank is likely to cut interest rates again and may consider further monetary policy easing.
Germany reported a small rise in retail sales, while France and Italy both experienced declines in their retail figures.
Retail sales rose by 1.5% compared to a year earlier, which is a slowdown from the previous month's increase of 2.2%.
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