In Europe, concerns are mounting over increasing prices on key elements to household budgets including rising costs in food prices, in energy costs as well as in overall housing affordability.
Nearly 80 per cent of households in the UK have seen some negative impact of these costs already while Germany, Spain and Italy homes also have seen these increases.
From recent surveys, it is evident that more than 90 per cent of French and German people believe that they will see significant price increases in the coming year. Figures for other EU countries were just as stunning.
With that comes news that Italian business confidence has slipped to a two year low. This too shows that the economy in the euro zone is falling, as businesses see consumer demand drop on manufactured goods. One of Italy's largest employers, Confindustria cut its growth forecast to just one per cent for 2008, which is half of what it was last year.
French consumer confidence has also dropped considerably. Here, the drop is considered to be the result of increasing consumer prices and accelerating inflation. Consumer prices here rose 2.8 per cent in December alone.
