Retail sales in the euro zone rose more than expected in May, after plunging in April, however economists say it is still too early to say if consumer spending can help the region’s economy recover. Eurostat, the European Union’s statistics office, recorded the strongest monthly increase since April 2004. The greatest improvement was in Germany,but that figure may have been distorted by statistical changes. The rise from April was 1.1% and compared with last year sales increase by 2%.
Month-on-month, retail sales of food, drinks and tobacco rose 2.2% while the non-food sector was up 0.5%. The figures are not expected to make any difference to the European Central Bank, which is likely to leave interest rates unchanged at 2% at its meeting on Thursday. ECB Governing Council member Jaime Caruana added to that expectation when he said in an interview with a Spanish newspaper that lower interest rates would not solve Europe’s economic problems, which are structural. The euro’s recent weakness against the dollar has also lessened the pressure for a cut in borrowing costs.