Eurozone GDP growth highest since financial crisis

Growth of GDP in the Eurozone hit its fastest rate in 10 years, as financial recovery moves full steam ahead. Meanwhile, the UK sees a marked improvement in consumer confidence.

Eurozone: European Central Bank
The 19 economies of the Eurozone last year expanded at their fastest pace for a decade, according to official figures from the EU statistics agency Eurostat.GDP in the bloc grew by 2.5 per cent, a figure unequalled since the three per cent recorded in 2007, the year before the financial crisis.

European Central Bank’s financial stimulus

The data was seen as vindication of the financial stimulus programme launched by the European Central Bank, which has seen the main interest rate reduced to zero and billions of euros spent a month on buying financial assets.Bert Colijn, senior eurozone economist at ING, said, “Economic growth has shifted to a substantially faster growth path over the course of 2017 and current GDP data confirms that. Eurozone growth for 2017 as a whole was stronger than many advanced markets, like the US and UK for example.“While detailed breakdowns have yet to be released, it seems that the eurozone economy continues to fire on all cylinders. Investment has yet to recover from the crisis fully but has been an essential contributor to growth during the year.” 
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Strength of the Euro remains uncertain

But Mr Colijn added that he remained concerned that the strength of the euro in international markets could push up the price of exports and hold back growth in 2018.
Jacob Deppe, head of trading at online trading platform Infinox, commented, “This is the best economic growth the eurozone has seen since before the global financial crisis. Where we go from here is anyone’s guess.“But with both the US and eurozone growing in tandem, and with Asian economies on a roll, the hope is that 2018 delivers continued growth, further confidence and economic stability for the first time in a decade.“There remain issues on the horizon. Unemployment in the eurozone, while falling, is still too high, particularly among the young.”

Consumer confidence in the UK

In other economic news, consumer confidence in the UK was reported to have grown at its fastest rate for a year, according to the YouGov/Centre for Economics and Business Research (Cebr) Consumer Confidence Index for January. The reading for the month stood at 108.2, up from 107.1 in December.Nina Skero, head of macroeconomics at Cebr, said, “Higher-than-expected GDP figures, a drop in inflation and now an uptick in consumer confidence – the new year is off to a promising start.“With household finances and upcoming business activity metrics both on the rise, the 2018 slowdown that many had expected looks less likely to materialise. At Cebr, we expect the UK’s economic performance this year to remain broadly in line with that seen in 2017.“It’s not all good news, though, as consumers remain doubtful about job security and future house prices.”
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