The French economy grew much faster than expected in the last quarter, but Germany suffered a slowdown.Latest: Italy GDP up by 0.3%Finland shrinks againGermany grows by just 0.3%Economist: It’s the Bayern Munich problemFrench GDP expands by 0.6%Introduction: It’s European GDP Day 9.51am BST Over in Athens prime minister Alexis Tsipras has called another cabinet meeting for this afternoon. This follows a marathon five-hour session on Tuesday, where cabinet ministers representing his anti-austerity government hotly debated concessions and “red lines”.“We will have neither a referendum nor elections [but] an honourable compromise.” 9.46am BST Back in the eurozone...and Portugal has reported growth of 0.4% in the first three months of 2015.Portugal GDP misses by a tenth 0.4% v 0.5% exp 9.36am BST The pound has hit a five-month high against the US dollar, up half a cent to $1.5727.Traders are welcoming this latest drop in UK unemployment, and calculating that it may herald an interest rate rise.#GBP spikes higher as UK labour data and earnings all strong. #BoE inflation report out in 1hr pic.twitter.com/ahuYI75pxb 9.34am BST Breaking news: the UK’s unemployment rate has fallen to 5.5%, its lowest level since the summer of 2008.The number of people out of work fell by 35,000 to 1.83 million, according to data just released by the Office for National Statistics.Unemployment rate drops to 5.5% and employment rate up to 73.5%. 202,000 more in employment in latest three months. Very good figures.Perhaps more importantly Avg UK Earnings (3M/Mar) better 1.9% vs 1.7% est vs 1.7% prev and Ex-bonus 2.2% vs 2.1% est vs 1.8% prev #gbp 9.21am BST So, the big news is that the eurozone’s five largest members all posted growth in the first three months of this year.A reminder of the key points so far: 9.11am BST It’s a morning of surprises... at 0.3%, Italy grew as fast as Britain and Germany last quarter.Italy Q1 GDP = UK Q1 GDP. Penalties in three months. 9.05am BST #Italy | Q1 PRELIMINARY GDP Q/Q: 0.3% V 0.2%E; Y/Y: 0.0% V -0.2%E ..knocking it out of the park in Italian GDP terms pic.twitter.com/gnz8hzQWEo 9.04am BST Get the bunting out! Italy’s economy expanded by 0.3% in the first quarter of 2015, faster than expected.However, that still means growth was flat over the last 12 months.Italy Q1 GDP comes in at 0.3% exp: 0.2% Prev: 0% 9.00am BST Corrrection. It appears that Austria is not reporting GDP data today, as I thought. Its statistics office did issue a preliminary estimate of 0.1% growth late last month. 8.58am BST Slovakia’s economy grew by 0.8% in the last quarter, beating forecasts of 0.6%. 8.53am BST European stock markets are rallying this morning, led by France.The French CAC has jumped by 0.9%, as traders welcome the news that its GDP rose by 0.6% last quarter. Yields lower, stocks higher. Makes a change pic.twitter.com/dIjday5qQC 8.49am BST It’s not a great day for Finland -- not only is its economy shrinking, but it’s about to get ticked off by Brussels for borrowing too much.Today Finland records negative growth, will be warned about its deficit, and will trigger Schadenfreude across the periphery. 8.41am BST Dutch Q1 GDP misses by a tenth 0.4% v 0.5% expected. 8.39am BST The Netherlands economy experienced a slowdown in the last quarter. Dutch GDP rose by 0.4%, down from 0.8% in the last three months of 2014 (which I think has been revised up from 0.5%) 8.21am BST Bad news for Finland. Its economy shrank by 0.1% in the first three months of the year, its statistics office has estimated.And that follows a 0.3% contraction in the last three months of 2014, meaning it is in recession.#GDP down second quarter in a row. #Finland plays in the same league with #Greece and #Cyprus. That's #recession http://t.co/4Q54xcJoVB#Finland's new govt coalition: A cheery bunch pic.twitter.com/jcikEkLKxn 8.08am BST Romania has beaten forecasts with quarterly growth of 1.6%. 8.07am BST More data is coming in.Hungary’s economy grew by 0.6% quarter-on-quarter in the first three month of 2015, or 3.4% compared to a year ago. Its statistics office said there was robust growth in manufacturing (mainly vehicles and electronics) and food production. 8.04am BST Analysts at BNP Paribas reckon the French GDP paints a unduly positive picture, because it is driven by household spending rather than business investment.BNP Paribas on French GDP: 'unexpectedly strong, but misleading' - driven by inventories, consumption + public spend. pic.twitter.com/EETz45N9E2 7.57am BST In the comments section, johnsnow92 has kindly explained why net trade had a negative impact on Germany’s growth rate:"Germany’s growth rate slowed because imports grew faster than exports."this doesn't make any sense, at allthis doesn't make any sense, at allIt makes when you calculate the GDP. 7.49am BST France’s finance minister, Michel Sapin, says today’s forecast-beating growth 0f 0.6% is “clearly comforting”, and bodes well for the rest of the year. “This first figure is very encouraging,....Our growth perspectives for 2015 are today clearly comforting.” 7.42am BST Thomas Gitzel, chief economist at VP Bank, blames weaker global demand for Germany’s slowdown:“Weak global trade is hitting German industry - an export heavyweight - and if the consumers start refraining from spending too, overall economic growth will decline rapidly.”“But there’s no reason to be miserable - the euro is weak and interest rates are low, both of which point to somewhat solid growth in the coming quarters.” 7.37am BST Germany’s economy is rather like its top football team, says ING economist Carsten Brzeski, good, but not quite good enough.As witnessed in yesterday’s soccer Champions League semi-final: a solid performance is not (always) sufficient to stay at the top. As Bayern Munich will probably now discuss new investments in its current squad, the German government should do the same for its economy.The labour market seems to have reached a level of full employment. New structural reforms would be needed to push unemployment below the level it has now been fluctuating around for two years. As regards investment, except for the construction sector, industrial production has moved rather horizontally for almost four years.Good but not good enough, or, the Bayern Munich factor. Quck take on German GDP data. http://t.co/LwZIBKBP3a 7.36am BST So #Germany growth slows more than forecast as #France accelerates 7.28am BST IHS Global Insight economist Diego Iscaro predicts that the French economy will grow faster than expected this year, but its jobless rate will remain too high:The sharp acceleration in activity during the first quarter ...points to growth in 2015 being somewhat stronger than the 1.0% expected by the government,” “However, we still do not estimate that the recovery will be strong enough to make a significant dent into France’s high unemployment rate”. 7.27am BST Who predicted this last year? France’s economy has grown twice as fast as Germany between January and March, and also twice as fast as the UK. 7.20am BST And here’s a Destatis chart, confirming that Germany’s growth rate has slowed: 7.17am BST Germany’s growth rate slowed because imports grew faster than exports.Destatis, the stats body, explains:According to provisional calculations, exports of goods and services were slightly up at the beginning of 2015 compared with the fourth quarter of 2014, imports recorded a much stronger increase. 7.09am BST #Germany disappoints. Q1 preliminary GDP comes at 0.3% QoQ lower than expected 0.5%. pic.twitter.com/AtdnidfSiM 7.02am BST Just in: Germany’s economy grew by 0.3% in the first quarter of 2015, weaker than expected.That’s a big drop on the 0.7% growth achieved in the last three months of 2014.MISS: German GDP (Q1) 0.3% QoQ vs 0.5% est vs 0.7% prev; 1.0% YoY vs 1.2% est vs 1.4% prev #eur 6.53am BST This charts shows how household spending (consumption) drove French growth in the last quarter, while business investment (GFCF) dipped. The big drop in net trade is because imports outpaced exports. 6.46am BST France needs to keep growing at this rate to bring its jobless rate down from record levels, says Bloomberg economist Maxime Sbaihi.France needs much more Q1-like quarters to reverse the investment decline & finally start bringing down a record-high unemployment rate. 6.43am BST Although France’s recovery is impressive, it was driven by consumer spending rather than business investment. That’s not a great sign.INSEE, the statistics office, explains:In the three first months of 2015, household consumption expenditure accelerated (+0.8% after +0.1%) while total gross fixed capital formation (GFCF) decreased again (–0.2% after –0.4%). Overall, total domestic demand (excluding inventory changes) increased: it contributed for +0.5 points to GDP growth (after +0.1 points in Q4 2014).FRANCE: GDP beats expectations, grows 0.6% in Q1 thanks to household consumption. But total investment fell for seventh consecutive month... 6.39am BST #French #GDP grew by 0.6% in Q1, its highest growth in 2 years (INSEE). Forecast was at +0.4%. 6.36am BST Allez les bleus 6.34am BST Here we go..... and France has smashed expectations.The French economy grew by 0.6% in the first three months of this year, having stagnated in the previous quarter.FRANCE! 6.29am BST Today’s GDP data may show growth in France and Italy picked up, predicts Michael Hewson of CMC Markets:France, in particular is set to see a significant rebound in economic activity, from 0.1% to 0.4% for Q1, however it is difficult to see how this will be sustained given that its manufacturing sector PMI’s have stayed stuck in contraction for the last eleven months.Germany on the other hand is expected to see a little bit of a slowdown from 0.7% to 0.5% in Q1, while Italy is expected to show its first growth in over a year, coming in at 0.2%, up from 0%. If all these numbers come in as expected the broader EU GDP number is expected to come in at 0.4%. 6.26am BST Today’s growth data should show that the European recovery is gaining momentum, write my colleague Katie Allen:Eurozone politicians are hoping for glimmers of a long-awaited economic rebound this week, with growth in the single-currency bloc forecast to beat both the UK and US.Economists expect the lower oil price to have provided a fillip to eurozone growth in the opening months of the year and have pencilled in a 0.5% pick-up in GDP, according to a Reuters poll ahead of Wednesday’s figures. That would be the fastest for four years..... Related: Eurozone pins hope on long-awaited economic rebound 6.15am BST Good morning. Today we discover whether the European recovery is continuing. Continue reading...
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