Confidence in Euro-area economy drops on supply squeeze, virus

The Bundesbank, Germany's central bank, has already warned that economic growth this year may be somewhat lower than the 3.7% it had forecast in June

Confidence in the euro-area economy slipped for the first time this year, suggesting that supply disruptions and the resurgent pandemic risk damping the recovery.

Sentiment eased in services, industry and among consumers, with a European Commission gauge falling to 117.5 in August from an all-time high the previous month. At the same time, an increase in selling-price expectations suggests inflation pressures are building across the bloc.

The region’s economic outlook has clouded in recent weeks. A shortage of raw materials, quickly climbing costs and transportation bottlenecks are disrupting manufacturing, while quickly rising coronavirus infections threaten new restrictions on services, which took over