Eurozone GDP growth ticks up to 0.6% in Q2; euro steady

Posted August 01, 2017

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 euro was 0.2 percent weaker against the dollar at $1.1817 at 11:32 a.m.in Frankfurt.

Growth in the eurozone accelerated slightly in the second quarter of 2017 as Europe's tentative economic recovery remained on track, official European Union data showed on Tuesday (Aug 1).

However, core inflation, a measure that excludes the most volatile components, namely food and energy, rose to 1.3 percent in July, up slightly from the 1.2 percent recorded in June.

The jobless rate fell to 9.1pc last month, from a downwardly revised 9.2pc in May, according to Eurostat.

"All in all, the euro zone economy has rounded out the first half of the year in a very healthy state and seems to be set up nicely for continued firm growth for the rest of 2017", Bert Colijn, senior economist at ING said.

The pound was boosted after data showing that United Kingdom factory growth rebounded in July on the back of a surge in new exports.

"We expect the eight-year-old global economic expansion will continue to strengthen and broaden for the remainder of 2017", noted the fund manager.

Meanwhile, the euro zone economy has picked up speed, bolstered by higher business optimism, strong domestic consumption and decreasing unemployment, which in June reached its lowest level since 2009.

The Euro jumped to its strongest position in two-and-a-half years against the US Dollar on Monday, ending London trading nearly one percent higher.

The flash estimate for July, due on Monday, is seen stable at 1.3 percent, well short of the ECB's target of just below 2 percent.

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.