Author: Press Association
German and French output grew by 0.3 per cent in the second quarter – the
first quarter of growth since the beginning of 2008.
The performance contrasts with the UK where official estimates showed output
declining by 0.8 per cent during the same period.
Across the 16 countries that use the euro, output fell just 0.1 per cent –
much lower than expected by economists.
The FTSE 100 Index reached new highs for the year following the data as
investors were encouraged by signs of recovery.
The duo are the first European countries to come out of recession, after
enduring four quarters of contraction.
David Buik of BGC Partners said Germany and France would recover more quickly
because of their prowess in exporting – contrasting with the UK’s emphasis
on services and banking.
“If one ignores manufacturing output and industrial production … financial
chickens come home to roost,” he said.
The wider Eurozone of 27 countries – which includes the UK and a host of
hard-hit Eastern European countries – saw a decline of 0.3 per cent.
Experts welcomed today’s figures but warned of a hard road to recovery ahead.
Jorg Radeke of the Centre for Economics and Business Research said:
“Celebrations may be short-lived in the face of rising unemployment, which
has so far been modest given the scale of the economic contraction.
“With output unlikely to return to pre-recession levels in the medium term,
unemployment may become a serious drag on the euro area’s economic
Bank of England Governor Mervyn King yesterday said UK growth was “more likely
than not to resume over the next few quarters” but he added that the timing
and strength of the recovery “remains highly uncertain”.
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