By Geoffrey Smith
Investing.com -- Confidence among German households plunged to a new record low in September as the spiraling energy crisis in Europe drove a sharp increase in intentions to cut back on other spending.
GfK's consumer confidence index for Europe's largest economy fell to -36.5 from a downwardly revised -30.9 in July. That's well below its previous troughs either during the Great Recession in 2009 or at the start of the pandemic in 2020.
"The fear of significantly higher energy costs in the coming months is forcing many households to take precautionary measures and set aside money for future energy bills," said GfK analyst Rolf Bürkl. "This is continuing to weigh on the consumer climate, because it leaves less money available for other kinds of consumption."
The numbers suggest that consumers are less advanced than businesses in adjusting to the harsh new realities of a life without cheap Russian oil and gas. Ifo's business climate index, typically the most reliable gauge of business sentiment in Germany, stabilized in August after plunging in July, according to figures released on Thursday.