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Added: Tue , 11 Nov 2008
Europe is shrinking
Written by Neil Hopkins
, Friday, 15 August 2008
The clearest evidence that the current economic slowdown is becoming more widespread came yesterday when the latest GDP figures revealed that Europe’s major economies are now shrinking.
According to Eurostat, GDP in the 15 economies of the eurozone, contracted by 0.2% between April and June, raising fears that the euro area is sliding towards a technical recession. Country-wise, growth in Germany fell by 0.5% while the big surprise was the 0.3% contraction in France, where the key driver of growth (household spending) was extremely weak. Activity in the Italian economy also contracted by 0.3%, bringing the annual rate of growth in Italy down to zero.
Not surprisingly, on the back of this data the euro was down on the day, trading at $1.4852 while the US dollar rally continued with Sterling hitting a 22-month of $1.8620. After a $3 rise due to a larger-than-expected drop in US crude and gasoline inventories, yesterday oil fell back to $115 a barrel.
Today’s data releases all focus on the US, kicking off at 13.30BST with the Empire manufacturing survey, followed by July’s industrial production at 14.15BST and finally, at 15.00BST, the reading for the University of Michigan confidence poll.
For more information, please download today's HSBC Economic Update.
According to Eurostat, GDP in the 15 economies of the eurozone, contracted by 0.2% between April and June, raising fears that the euro area is sliding towards a technical recession. Country-wise, growth in Germany fell by 0.5% while the big surprise was the 0.3% contraction in France, where the key driver of growth (household spending) was extremely weak. Activity in the Italian economy also contracted by 0.3%, bringing the annual rate of growth in Italy down to zero.
Not surprisingly, on the back of this data the euro was down on the day, trading at $1.4852 while the US dollar rally continued with Sterling hitting a 22-month of $1.8620. After a $3 rise due to a larger-than-expected drop in US crude and gasoline inventories, yesterday oil fell back to $115 a barrel.
Today’s data releases all focus on the US, kicking off at 13.30BST with the Empire manufacturing survey, followed by July’s industrial production at 14.15BST and finally, at 15.00BST, the reading for the University of Michigan confidence poll.
For more information, please download today's HSBC Economic Update.
