Eurozone GDP grew at twice the rate of UK in second quarter of 2017

Eurostat's 'flash' estimate for growth in the single currency bloc was 0.6 per cent, double the 0.3 per cent estimate for the UK from the Office for National Statistics last week

The eurozone’s GDP grew at twice the rate of the UK’s in the second quarter of 2017, official statistics showed on Tuesday.

Eurostat’s “flash” estimate for growth in the 19-member single currency bloc was 0.6 per cent, double the 0.3 per cent estimate for the UK from the Office for National Statistics last week.

This is the second solid quarter of eurozone growth, following the 0.5 per cent expansion in the three months to March.

In the first quarter of 2017, the UK economy is estimated to have grown by just 0.2 per cent.

The UK economy grew surprisingly strongly in the wake of the Brexit vote in June 2016, with an expansion of 0.5 per cent in the third quarter of the year and 0.7 per cent in the final quarter.

Many economists had predicted a recession.

But a jump in inflation, stemming from the 13 per cent slump in the value of the pound in the wake of the referendum, has dampened consumer spending this year, and pushed the UK’s growth rate to the lowest of the G7 club of large and developed economies.

Most analysts expect further subdued UK growth in the second half of 2017 too as consumers continue to feel the squeeze from higher prices and firms hold back from investment due to uncertainty about post-Brexit trade arrangements.

Forward-looking surveys of business activity in the major sectors of the eurozone economy have also shown a stronger picture than in the UK this year.

However, the UK economy has grown faster than the eurozone’s since the 2008 financial crisis, reflecting the single currency’s multiple crises between 2010 and 2013.

Since 2008, UK GDP is 11 per cent higher, compared to 6 per cent higher in the eurozone.

The eurozone’s current period of strong growth is thought to reflect a cyclical bounceback, also helped by the European Central Bank’s ongoing monetary stimulus programme.

The single currency zone has now seen 17 successive quarters of growth.

The unemployment rate in the eurozone currently stands at 9.1 per cent, down from 12 per cent in 2013, but still double the UK’s current rate of 4.5 per cent.

Other data last week showed that, within the eurozone, France’s GDP expanded by 0.5 per cent in the second quarter and Spain’s by 0.8 per cent.