European GDP growth seems to have settled at a rate above 2%. Eurostat, the European Commission’s statistical division, released December quarter “flash” estimates of euro-area GDP on Tuesday night Australian time. They indicate GDP increased by 0.6% for the quarter and 2.7% over the last twelve months. The figures were in line with expectations but they were below September’s comparable figures of 0.7% for the quarter and 2.7% over the previous year.
These figures are the latest in a string of GDP growth rates above 2%. In response to recent stronger growth rates, the ECB announced in October it would wind back its asset purchase programme. Prior to January 2018, the ECB had been purchasing €60 billion worth of bonds and asset-backed securities each month. From January onwards, the new monthly pace of purchases was halved to €30 billion. Currently, the APP is expected to cease in September 2018.
Euro area growth rates have been higher than those of the U.K. since the June quarter. The latest December quarter growth rate in the U.K. was 1.5%.
