European confidence drops as crisis deepens

European confidence in the economic outlook fell by a record after the worsening credit crisis sent stocks plunging, shut off companies' access to funding and heightened concerns that a recession looms.

An index of executive and consumer sentiment dropped 7.1 points to 80.4, the European Commission in Brussels said yesterday. That is more than the 1.7-point drop economists had forecast and is the biggest slide since the data were first compiled in 1985. The decline takes the gauge to the lowest in 15 years.

Europe's automobile manufacturers, chipmakers and airlines are feeling the pressure as the financial crisis that prompted interest-rate cuts and government bailouts of banks spreads to the wider economy. Deutsche Lufthansa AG, the region's second-biggest airline, on Wednesday said it will trim expansion plans as slowing economic growth hurts passenger and cargo traffic.