PARIS (AFP) - Economic data to be released this week are expected to show slipping business and consumer eurozone confidence in September and slowing economic growth in Britain as rate hikes braked expansion, economists said.
Whereas the European Central Bank has talked of the economic recovery in the 12-state eurozone becoming more broadly based, the data may signal that the recovery remained stuck at a moderate pace, they said.
Germany, France and Italy will release key confidence numbers, while the European Commission will publish its eurozone economic sentiment survey. Purchasing managers' indices for the manufacturing sector will also be released.
"How these (surveys) have fared should help our insight into the prospects for firmer domestic demand growth," said Philip Shaw of Investec.
The German Ifo business climate index will kick off the week early Monday, and economists were looking for a further small decline in the index in September.
The index for the eurozone's biggest economy has been on a downward trend since the start of the year, dragged lower by declines in the business expectations component.
"Economic expansion appears to be losing momentum," said Lorenzo Codogno of Bank of America.
Stefan Bielmeier and Manuela Presuchl of Deutsche Bank said: "The renewed increase in oil prices and rising concerns that high oil prices could dampen worldwide demand should have led to another decline in the Ifo index in September. This would be the fourth fall in the last five months, which would suggest that German GDP growth will be less dynamic in the second half than the first."
INSEE's French business climate indicator and ISAE's Italian business confidence figures were also expected to ease slightly on concerns about the pace of global growth and the impact of oil price rises.
The European Commission's economic sentiment survey and the manufacturing PMI data, both due on Friday, will show a similar picture, economists said.
Eurozone headline inflation was expected to show a slight fall in September as the effects of the oil price rise remain confined to energy prices, without knock-on effects onto the prices of other goods.
However, the ECB remained wary of future inflation risks and would therefore be closely scrutinising Monday's eurozone August money supply and credit data.
The slowdown in M3 money supply growth has ended and the central bank was sounding increasingly concerned about the inflation risks of excess liquidity.
It was particularly worried about strong growth in private sector loans, especially mortgage lending, so these components of the data would be particularly closely watched.
Loan growth reached 6.2 percent year-on-year in July, with mortgage lending up 9.0 percent.
Emmanuel Ferry of Exane said it was the revival of credit growth which was preventing M3 growth from falling.
In Britain, a raft of data should provide sterling markets with a clearer picture about the extent to which the British economy was slowing down in the wake of higher borrowing costs.
Though second-quarter GDP figures, due out on Wednesday, were set to show the economy continuing to grow above its long-term average rate, other secondary data were poised to show consumption slowing following the Bank of England's five quarter-point interest rate increases since last November.
That may all be enough to cement market expectations that the central bank's key repo rate was unlikely to rise much further from the current 4.75 percent.
However, analysts still expected one more quarter-point hike as the economy continued to grow above trend -- estimated to be 2.50 percent by the Bank of England.
Final GDP growth figures for the second quarter on Wednesday were expected to be unchanged with the quarterly rate at 0.9 percent and the year-on-year rate standing at 3.7 percent.
Philip Shaw, chief Britain economist at Investec, would be particularly interested to see the household spending data incorporated in the accounts, in light of the earlier than expected slowdown in the housing market.
The central bank's rate-setting body, the Monetary Policy Committee, has been hiking rates in an attempt to curb the inflationary pressures stemming primarily from rampant consumer demand, particularly in the housing market.
Perhaps most important will be Thursday's monthly housing market survey from the Nationwide, Britain's largest building society.
The Nationwide was expected to echo earlier surveys suggesting that the house price boom was over, even though analysts reckoned the monthly increase in house prices would stand at 0.7 percent, up from August's 0.1 percent.