Eurozone business confidence dips to near three-year low in August

Business confidence in the euro zone dipped to near three-year low in August, one of the many signs that the United Kingdom’s vote to leave membership of the European Union may have just started to crib the common currency zone.

Business sentiment in the single currency area fell sharply to a near three-year low in August, tumbling from a reading of 0.38 to just 0.02 this month. Economists had forecasted a moderate fall to 0.36 from July.

In addition, four of the five largest eurozone members also saw economic confidence slide, according to the European Commission, helping push the overall index to a four-month low, down by 1 point to 103.5, steeper than the 104.1 forecasted by market participants.

Further, confidence in the industrial sector suffered the sharpest reversal as surveyed manufacturers reported their worst deterioration in current orders since the depths of the financial crisis in 2009.

Meanwhile, services confidence declined by 1.2 points on the back of lower demand expectations, with retail trade falling 2.7 points.