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Eurozone Growth Slows But Still Eclipses UK Growth

By Dr. Mike Campbell
Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.

The UK economy has gone from being the fastest growing economy in the G20 to the slowest. The only difference that has happened in this reversal is the decision of the UK to leave the EU, so to all Brexit supporters, this is the proof that the decision they took is harming the UK economy now. The extent of the harm that the decision has generated (if it is carried through) will only emerge fully after the transitional period ends, since the UK economy will be sheltered from the decision by the fact that the UK will effectively remain in the EU for 20 months during the transitional period (it is still uncertain that the transitional period will be agreed, of course).

To underline the point, the Eurozone economies suffered slowed growth in Q1 2018 down from 0.7% to 0.4%. A decline of 0.3% quarter on quarter might be worrying, but the UK shrank from 0.4 to 0.1% over the same period and therefore growth in the Eurozone is currently four times that in the UK (as percentages mean little, the UK GDP is about $2.6 trillion compared to the Eurozone figure of $13.4 trillion, roughly five times the size of the UK economy).

The UK economy has now been outstripped in growth terms by the Eurozone in five out of seven quarters since the Brexit vote. The UK’s growth has been slower than the USA’s and the Eurozone’s for the past four quarters.

Most analysts are now suggesting that UK economic data is mitigating against the idea of an immediate interest rate rise when the Bank of England’s Monetary Policy Committee meets later this month. The Euro has been regaining ground against Sterling since the middle of May as Forex markets have weighed up the chances of a rate rise and Brexit headwinds.

Dr. Mike Campbell
About Dr. Mike Campbell
Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.
 

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