EUROPE – The European Central Bank and the Bank of England have both acknowledged the role that fears over pensions may be having on consumption.

“Even though consumers have remained relatively optimistic about financial prospects in the short term, it is possible that some households have become concerned about their longer-term income prospects,” the BOE said in its latest inflation report.

It said the recent Pensions Commission Report “may have focused some people’s attention on the inadequacy of their pensions”.

And fears over retirement income was consistent with more older people joining in the labour force – which has been in train for some time, the bank added.

“So the recent slowing in consumer spending growth is unlikely to be directly attributable to heightened concerns over pensions, though it may weigh on household expenditure going forward.”

Similar views have been expressed by the ECB hierarchy.

Executive board member Otmar Issing said in an interview with Italy’s Il Sole 24 Ore yesterday that private consumption in Europe has been moderate, due to lower consumer confidence for some time.

He was quoted saying: “The reasons for this can be traced back to uncertainty over the economic situation, over employment in many countries, and over the future of the pension system, as well as to political uncertainty in a number of Member States.”

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