Europe reports U.S. credit crisis fallout

FRANKFURT, Germany, Oct. 26 (UPI) -- European capitals report feeling the autumn fallout from last summer’s U.S. credit crisis.

There are signs of slackening economies and further market upheaval from a reduced growth forecast in Germany to warnings of vulnerability by the Bank of England, The New York Times said in a report from Frankfurt, Germany.

So far, the report said, confidence, surging in recent years, is perhaps Europe’s biggest loss from the crisis, triggered largely by the U. S. home-mortgage market.

The financial turmoil, Joaquin Almunia, the European commissioner of Economic and Monetary Affairs said, "has spread a lack of confidence in the financial markets and beyond, in a manner and intensity that was not foreseeable."

The Bank of England warned that although there have been recent signs of recovery, “the financial system remains vulnerable to further shocks."

The German government cut its forecast for growth next year from 2.4 to 2 percent, citing a more sluggish global economy.