(BRUSSELS) - Consumer and business confidence in the European Union slumped in November to the lowest level in 23 years in the face of looming recession, according to an EU survey on Thursday.

The European Commission's EU economic sentiment indicator tumbled to 70.5 points in November from 77.2 in October, hitting the lowest level since the survey was created in January 1985.

Meanwhile, the commission's eurozone economic sentiment indicator fell to 74.9 points in November from 80.0 points in October, dropping to its lowest level since August 1993.

The slump in eurozone confidence exceeded by a wide margin economists' forecasts for a fall to 78 points, as polled by Dow Jones Newswires.

"Reflecting the widespread deterioration in economic sentiment, all EU countries reported weakening sentiment," the commission said.

The EU's executive arm's separate monthly business climate indicator for the eurozone retreated to the lowest level since October 1993, dropping to a negative 2.14 points in November from a negative 1.34 in October.

Economists said that retreating confidence painted a dark outlook for the European economy, which has been getting worse almost by the day.

"The further plunge in economic sentiment in November bodes ill for investment, employment and consumer spending," said IHS Global Insight economist Howard Archer.

He added that it also "heightens fears that the region's recession will be deep and prolonged."

Capital Economics analyst Jennifer McKeown said the drop in eurozone confidence suggested that the bloc's economy would contract more than widely expected next year.

"It has been a reliable indicator of annual GDP (gross domestic product) growth in the past and now points to falls of around 1.0 percent," she said.

The Organisation for Economic Cooperation and Development forecast on Tuesday that the countries sharing the euro would see their combined economy shrink 0.6 percent in 2009 and warned recovery was unlikely before the second half of 2010.

The European Commission called on Wednesday for a 200-billion-euro (259-billion-dollar) stimulus package to snap Europe's economy out of recession through spending hikes and tax breaks.

In light of the confidence surveys, Archer said that "there is clearly scope for the ECB to deliver a sizeable interest rate cut next Thursday."

He said that was all the more the case since inflation has been in steady retreat in recent months towards the European Central Bank's preferred level of close to but less than 2.0 percent.

"The general impression from recent comments by ECB is that another 50 basis point cut ... is the most likely outcome at the 4 December policy meeting, but there is a very strong case for the ECB to take much bolder action," he said.

• Economic Sentiment Indicator (ESI)
• Business Climate Indicator

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