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The UK and Eurozone are lockstep behind the US in the entrance of this global economic slowdown and probable hard landing. At least the UK is admitting it has problems. The ECB, Trichet, et. al. are too busy cheerleading and pointing fingers to realize the extent of their problems, at least up until now. The article states that things are worst than economist and analysts forecasts, but I have been drumming this beat for some time now. Things are just about where I thought they would be. I guess that's because I am not an economist or analyst:-)

From Bloomberg

European Retail Sales Drop by Record on Rising Costs (Update2)

European retail sales dropped 1.6 percent in March from a year earlier, the most since at least 1995 and twice as much as economists forecast, as soaring fuel and food costs sapped consumer spending.

Retail sales in the euro area declined 0.4 percent on the month, the European Union's statistics office in Luxembourg said today. Economists had forecast a 0.7 percent annual decline, according to the median of 20 estimates in a Bloomberg News survey.

The European Central Bank governing council, which meets tomorrow to set interest rates, has refused to follow its counterparts in the U.S. and the U.K. in cutting interest rates, arguing that domestic demand will help sustain economic growth. Now, the surge in food and crude-oil prices, which has focused policy makers' attention on inflation, is also undermining consumer sentiment.

``This is pretty grim,'' said Ken Wattret, senior economist at BNP Paribas in London. ``The big picture has been very weak for some time and up until this point the ECB has been in denial. They keep on cheerleading the improvement in consumption, but it simply hasn't happened.''

The euro extended losses following the report, falling as much as 0.5 percent to $1.5451. It traded at $1.5467 at 11:42 a.m. Brussels time.