Morale among German consumers improves heading into June, helped by a growing willingness to make purchases. But as Ciara Lee reports the picture doesn't look quite as rosy in France.
Spring has sprung in Germany with consumer sentiment growing further in the past month. A positive economic outlook led to the index hitting the highest level in 13 years, beating analyst forecasts. Private consumption has now eclipsed exports as Germany's main engine of growth. Record low unemployment and ultra low interest rates are making consumers more willing to open their purse strings. There was a hint of caution for Germany though. Personal income is expected to slip this month as rising energy prices fuelled expectations for higher inflation. Gemma Godfrey from Brooks MacDonald says outside risks also remain. (SOUNDBITE) (English) HEAD OF INVESTMENT STRATEGY AT BROOKS MACDONALD ASSET MANAGEMENT, GEMMA GODFREY, SAYING: "We saw consumer confidence in Germany rise to a 13 and a half year high but at the same time we saw consumer spending in France fall. So what this is saying is there is still a substantial amount of instability within the region. And we are not justing talking about Greece there but just within the countries that are potentially more stable their economics are still so different that unless we see further and closer integration there could be further turmoil in the future." The mood wasn't so buoyanct in France though. Consumer confidence there eased slightly in May. It marks the first decline in seven months after improvement had been seen in the euro zone's second largest economy.