Given the persistence of these factors, our latest forecasts have incorporated a flatter profile for consumption growth than has been the case in previous forecasts. An important issue shaping the future is how these cross-cutting themes are resolved: businesses feel better than they have for some time, but consumers feel weighed down by weak income growth and high debt levels.
Deutsche Bundesbank (2010), “The cyclical effects of concurrent fiscal consolidation with the euro area”, Monthly Report, July, pp. 30–31. Di Mauro, F. and K. Forster (2008), “Globalisation and the competitiveness of the euro area”, ECB Occasional Paper No. 97, September.