Consumer reports paint gloomy euro zone picture

Consumer reports from two of the top three euro zone economies cast a shadow over prospects for an early rebound in growth today…

Consumer reports from two of the top three euro zone economies cast a shadow over prospects for an early rebound in growth today but the European Central Bank showed no sign of lending a hand by cutting interest rates.

French household spending took its biggest dive in more than six years, raising the spectre of recession in the bloc's second-largest economy, while an Italian consumer confidence report also revealed pessimism among shoppers.

But ECB Governing Council Member Mr Ernst Welteke said the ECB was not shifting from its "wait and see" stance on rates and predicted business activity would pick up and put the 12-nation bloc on its way to faster growth.

"I do not see the need for an interest rate cut in the near future. Rates are appropriate," Mr Welteke, also the president of Germany's Bundesbank, told Reuters news agency in an interview in Dubai on the sidelines of the annual International Monetary Fund meeting.

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And US Treasury Secretary Mr John Snow warned that the American consumer could not be expected to spur growth around the world and urged others to foster home-grown expansion.

"There's increasing acceptance that particularly the major economies of the world need to focus on their demand-led growth, take steps to put in place reform policies that allow their domestic economies to perform well," Mr Snow said.