Omicron dents euro zone’s economic rebound; inflation at record high

Omicron dents euro zone’s economic rebound; inflation at record high

FRANKFURT- Euro zone economic sentiment dropped more than expected last month while inflation hit another record high, indicating the economy is under renewed stress as surging coronavirus infections force governments to tighten restrictions. With infections breaking records almost daily as the Omicron variant sweeps across Europe, growth is likely to take a hit around the turn of the year even though governments have largely avoided the debilitating measures that brought their economies to a standstill a year ago. Foreshadowing the pain, the European Commission's Economic Sentiment Indicator, a key gauge of the bloc's economic health, fell more sharply than forecast in December to a level last seen in May. The outlook for services worsened significantly and employment expectations also fell. In Germany, the euro zone's biggest economy, the slowdown is already evident in hard data. Supply chain bottlenecks have held back Germany's vast factory sector for most of the last quarter and industry, thought to be on the rebound, unexpectedly stumbled in November. urn:newsml:reuters.com:*:nL8N2TN14S Output fell 0.2% on the month, despite expectations for a 1% rise, reinforcing views that Europe's biggest economy came to a halt in the fourth quarter of 2021, with no relief in sight for months. "Unfortunately,