Eurozone economy grows twice as fast as UK's, figures show

Eurozone economy grows twice as fast as UK's, figures show

In annualized terms, the eurozone economy accelerated by 2.3 percent in the second quarter after a two percent rise in the first three months of the year, according to Eurostat.

The data reinforces the view that the Eurozone economy continues to gain momentum after more than two years of massive asset purchases by the European Central Bank and nearly a year and a half of negative interest rates.

Spain, which has the second-highest rate of unemployment in the eurozone at 17.1 percent, saw the biggest fall - down from 2.8 percent from the previous year.

In the eurozone, growth has quickened and unemployment has fallen against the backdrop of ultra-low interest rates and other measures by the European Central Bank (ECB) to boost activity.

Most analysts expect further subdued United Kingdom 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.

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The findings of the latest poll are in line with a separate Reuters survey of economists published earlier in July, which showed expectations for euro zone growth was strong and a reduction in policy accommodation was in the pipeline [ECB/INT].

The ECB targets inflation of "just below 2 percent".

Eurozone unemployment fell further in June to reach its lowest level since February 2009, continuing the trend of a strengthening European economy.

The euro is trading at levels not seen since January 2015 and has posted its best run in five years as dollar weakens and the euro zone economy starts to gradually improve. The jobless rate is forecast to remain unchanged at 5.7% in July. According to Reuters, the market had expected prices to drop to 1.1 percent.

Monday's flash inflation reading for July showed core CPI rose unexpectedly to 1.3% from 1.2%, beating forecasts that it would ease to 1.1%.

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