Dive in eurozone sales

Retail sales dropped far more sharply than expected last month in the 17 countries which use the euro, as the single currency crisis began to have direct effects on consumers.

Between August and September sales fell by 0.7% which was far worse than the average 0.1% drop predicted by economists.

This was the first negative reading on retail sales since May. It was also worse than the 0.3% decline in sales reported across the 27 members of the EU.

"Our view that the euro area would slide into recession in the current (fourth) quarter appears to be playing out," investment bank JPMorgan said, predicting a 1% economic contraction in the last three months of the year and a return to growth only in the fourth quarter of 2012.

The sharpest decline in sales was in Portugal, down 3.7% and Spain, down 1.7%, although numbers for both Italy and Greece were not released today.

There was a stark contrast in performances between the two largest eurozone economies, with German sales up 0.4% and French ones down by 0.6%.