EU Economy Growing Faster Than US and UK, With China Also on the Up

• July 31, 2017
• By Pete Nisbet
• 0

The EU economy is on a high. Growth in the euro zone during the second quarter of this year exceeded that of both the US and the UK. This trend started in the first January to March quarter of this year and has extended into the second quarter. The IMF recently upgraded forecasts for growth in the EU, particularly in the euro zone. However, this might not continue.

UK Economy ‘Languishing’

Consumer spending has been increasing in the US and should be competing with the EU on the growth front. However, the UK economy appears to be languishing in a trough of its own making. Government departments and cabinet ministers appear to be unable to agree on actions to take in the Brexit era. Phillip Hammond and Liam Fox disagree in public – this does not give the UK public much confidence.

Philip Hammond, Chancellor of the Exchequer, is hoping to employ a strategy involving the continued free movement of EU labor until 2022. This is not what the people of the UK voted for when supporting Brexit. The UK is not alone with a struggling economy but it is not where a major country should be. It is forecast that the EU economy will expand by around 0.6%.

EU Countries Economies Growing

This equates to an annualized figure of 2.4%. The US also had a good second quarter, equivalent to an annualized figure of 2.6%. Both these figures cab be compared to the UK, whose economy improved by 0.3%. The economic performance of individual EU countries is worth consideration. Bearing mind that the UK with only 0.3% increase is still an EU country, France grew by 0.5% and Spanish growth reached the dizzy height (for Europe) of 0.9%.

IMF Predicts Improved Economy for China and Eurozone.

The IMF (International Monetary Fund) has predicted that the economies of China and the Eurozone members of the EU will continue to improve. The economies of the UK and the US, it has predicted, will also improve but at a lower level. However, the IMF has noted some risks to EU economy. This is in spite of positive factors, such as Greece returning to the bond market after an exile of three years.

The outlook seems positive for the Eurozone members of the EU. Those not yet using the Euro are Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom. Only the UK and Denmark do not have to adopt the euro once they meet the economic conditions to permit entry. Although the UK will be irrelevant come 2019.