The GfK Consumer Climate Europe study for the third quarter of 2014 paints a gloomy outlook for the European economy, noting in particular that while there is a backdrop of growth in the UK, the Scottish referendum harmed consumer confidence to a degree.

UK consumers are considerably less optimistic about the next few months than they had been in June, according to the report. Economic expectations have dropped by more than 13 points, but the indicator is still at a very good level, of 24.6 points. The Scottish referendum is one possible reason for this decline, but with Scotland voting to remain part of the UK, and general economic data being extremely good, a higher value is expected in October.

According to GfK, British consumers are not confident that they will see an improvement in their income situation. The indicator dropped by 6.5 points over the summer and is at 1.5 points at present, the lowest value since December last year. Only willingness to buy was able to record a slight increase, rising to -2.2 points. However, the negative value shows that UK consumers are still exercising great caution with regard to buying more expensive products. A positive value was recorded for the first time since August 2007 when it climbed to 0.1 points in August. In comparison with September 2013, the indicator has risen by around 21 points overall.

This pattern is mirrored across Europe. Over the past three months, economic expectations have fallen in almost all countries in the survey, with quite substantial declines recorded in some areas. The upward trend for both income expectations and willingness to buy also appears to have come to an end in many countries.

"Germany is no longer the engine room of economic growth in Europe, with its economy actually declining slightly by 0.2% in the second quarter," reports GfK. "According to experts, growth is expected to return again in the third quarter, albeit remaining somewhat weak. While German consumers continue to enjoy shopping, the export-oriented sector of the economy has been encumbered by weak foreign demand. This is affecting countries of the EU as well as emerging nations such as Brazil, China and Russia. The economies of these regions have seen very strong growth in some areas in recent years. However, growth rates have in the meantime slowed and are in the single-digit range. Consumers have, to a large extent, fulfilled their need for material things, and are not consuming as much as they have in the past.

"Two of the largest economies in Europe, France and Italy, continue to have major structural problems. There are so far no indications that this will change in the coming months or that governments are beginning to undertake and above all fully enact major reforms.

"The major conflicts that have recently been dominating the global stage are a further consideration. These include the tensions and economic sanctions between Russia and the EU, the war in the Middle East, the threat posed by Islamic State (IS) and the political transition in Turkey. These events are all contributing to increased uncertainty among consumers. Companies and banks have therefore been holding back from investments and granting loans. This is in turn having a direct impact on the economic performance of the individual countries."

The low level of inflation is also a factor. In September, inflation was 0.3 percent across Europe, the lowest value in almost five years. A number of countries are already battling against deflation, which means consumer prices are falling. European consumers share the view of businesses that the economy is no longer as stable as it was in early summer.

The findings of the GfK Consumer Climate Europe are taken from a consumer survey carried out in all countries of the EU on behalf of the European Commission. Approximately 40,000 individuals, representing the adult population in the EU, are surveyed on a monthly basis in 28 countries.