Euro zone consumer confidence fell in April after three months of gains, the European Commission said today, as stubborn inflation and rising unemployment dampened a revival in morale.

Consumer confidence slid to -19.8 in April, from a revised -19.1 reading in March and slipping from gains made in the first three months of the year, when morale recovered from a 26-month low hit in December. The Commission had earlier put the March figure at -19.0.

In the wider 27-member European Union, consumer sentiment was -20.1 in April from -19.3 in March, the Commission said.

Consumer spending makes up more than half of the euro zone's economic output, but households are being badly squeezed by wage cuts, government spending freezes and record unemployment.

EU leaders want to drive economic growth and employment after two years of crisis and austerity, but the region has little immediate cash to invest and faces the longer-term challenge of falling productivity and an ageing workforce.

The Commission forecasts a 0.3 per cent economic contraction in 2012 in the euro zone.

Reuters