(Bloomberg) -- Euro-area consumer confidence dropped to its lowest level on record as households brace for a possible recession amid record inflation and the risk of a Russian energy cutoff.

A monthly gauge from the European Commission showed a reading of -27 in July -- down from -23.6 in June and worse than the -24.9 median estimate in a Bloomberg survey of economists.

The war on the region’s border has caused energy prices to shoot up and worsened strains on global supply chains. The risk of a shutoff in natural gas supplies in retaliation for sanctions over Russia’s invasion is a particular worry, with an International Monetary Fund paper estimating it could translate into a 2.65% hit to the European Union economy. 

As recession fears mount, the European Central Bank is set to lift interest rates for the first time in more than a decade on Thursday. While consumer spending has held up so far, the prospect of higher borrowing costs and a looming downturn risk curbing demand. 

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