Thursday 23 January 2020

Spectre of eurozone recession dispelled as services pick up

 

Inflation here has been running at levels that are less than half of the subdued levels in the eurozone, thanks in part the impact of Brexit worries on the pound as a weaker pound translates into lower costs here for goods (stock photo)
Inflation here has been running at levels that are less than half of the subdued levels in the eurozone, thanks in part the impact of Brexit worries on the pound as a weaker pound translates into lower costs here for goods (stock photo)

Paul Gordon

The eurozone economy edged gradually away from stagnation at the end of 2019 as services picked up to counter moribund manufacturing.

A gauge of private-sector activity by IHS Markit climbed to 50.9 in December, slightly better than a flash estimate and holding above the 50 level between expansion and contraction.

While that's the highest in four months, it still signals the economic ills, with growth at the weakest in six years and manufacturing shrinking.

IHS Markit estimates that GDP rose about 0.1pc in the final quarter.

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An upward revision to Germany's services measure gave the euro a boost. The euro itself rose on the news.

Investors have become more confident, and are the most optimistic on the euro-region economy since the end of 2018, a separate survey by Sentix on Monday showed.

"The spectre of recession seems to have been dispelled," it said, though it predicts only a "slight upswing" in growth.

Bloomberg

Irish Independent

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