This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2020/jan/31/french-gdp-shrinks-eurozone-gdp-economy-italy-business-live

The article has changed 15 times. There is an RSS feed of changes available.

Version 10 Version 11
Eurozone growth slows sharply as French and Italian economies shrink – business live Eurozone growth slows sharply as French and Italian economies shrink – business live
(32 minutes later)
Rolling coverage of the latest economic and financial news, as France’s economy contracts by 0.1% in the last quarterRolling coverage of the latest economic and financial news, as France’s economy contracts by 0.1% in the last quarter
French finance minister blames strikes Back in the City, investment services platform Hargeaves Lansdown are the biggest FTSE 100 faller, down almost 7%.
HL reported that its net new business declined 9% year-on-year in the last quarter. That’s partly due to the scandal around Neil Woodford’s funds, which HL had promoted as “best buy” options.
“Best avoid” would have been better advice, given the huge losses which investors face.
HL’s CEO, Chris Hill, says it has been a tough few months:
Paul Mumford, fund manager at Cavendish Asset Management, suggests 2020 will also be bumpy for Hargeaves Lansdown:
France’s finance minister has blamed the industrial action and protests against the French government for the slump in growth in the last quarter.France’s finance minister has blamed the industrial action and protests against the French government for the slump in growth in the last quarter.
Insisting that the underlying economy is strong, Le Maire says:Insisting that the underlying economy is strong, Le Maire says:
Le Maire has a point - as explained earlier, consumer spending and investment was still positive. The 0.1% drop in growth was due to businesses running down inventories.Le Maire has a point - as explained earlier, consumer spending and investment was still positive. The 0.1% drop in growth was due to businesses running down inventories.
But, if those firms remain nervous, they could move onto cutting orders and axing staff....But, if those firms remain nervous, they could move onto cutting orders and axing staff....
Capital Economics are also gloomy -- predicting that 2020 will be a weaker year than hoped.Capital Economics are also gloomy -- predicting that 2020 will be a weaker year than hoped.
Christoph Weil, economist at Commerzbank, reckons the European Central Bank will be very concerned by the eurozone slowdown - which could spur it into more stimulus measures.Christoph Weil, economist at Commerzbank, reckons the European Central Bank will be very concerned by the eurozone slowdown - which could spur it into more stimulus measures.
Weil says (via the FT):Weil says (via the FT):
The eurozone growth slump is partly due to Donald Trump trade wars, says Barret Kupelian, senior economist at PwC.The eurozone growth slump is partly due to Donald Trump trade wars, says Barret Kupelian, senior economist at PwC.
We don’t yet know how the UK fared in the last quarter; the most recent figures show 0.1% growth in September-November.We don’t yet know how the UK fared in the last quarter; the most recent figures show 0.1% growth in September-November.
But Kupelian points out that the eurozone has actually outperformed the UK since the Brexit vote -- as Britain “missed out on the synchronised upswing in economic activity in 2016/17.”But Kupelian points out that the eurozone has actually outperformed the UK since the Brexit vote -- as Britain “missed out on the synchronised upswing in economic activity in 2016/17.”
European stock markets are sliding again today, hit by the unexpectedly weak growth figures and the ongoing coronavirus crisis.European stock markets are sliding again today, hit by the unexpectedly weak growth figures and the ongoing coronavirus crisis.
Every index is down, led by Italy (down 1.4%) and Spain (-1%).Every index is down, led by Italy (down 1.4%) and Spain (-1%).
In London, the FTSE 100 is also suffering, down 60 points or 0.8% to a six-week low.In London, the FTSE 100 is also suffering, down 60 points or 0.8% to a six-week low.
The news that Britain now has two coronavirus cases is also worrying traders (and the rest of the public too, I suspect).The news that Britain now has two coronavirus cases is also worrying traders (and the rest of the public too, I suspect).
Josie Dent, Senior Economist at the CEBR, points out that France and Italy are now half-way into recession following their contractions last quarter.Josie Dent, Senior Economist at the CEBR, points out that France and Italy are now half-way into recession following their contractions last quarter.
Here’s Reuters’ take on today’s growth reports:Here’s Reuters’ take on today’s growth reports:
In another blow to households, inflation across the eurozone has picked up.In another blow to households, inflation across the eurozone has picked up.
Consumer prices rose by 1.4% year-on-year in December, up from 1.3%, due to rising food, alcohol and tobacco prices.Consumer prices rose by 1.4% year-on-year in December, up from 1.3%, due to rising food, alcohol and tobacco prices.
Some snap reaction to the eurozone slowdown:Some snap reaction to the eurozone slowdown:
Newsflash: Growth across the eurozone, and the European Union, slowed sharply in the last quarter.Newsflash: Growth across the eurozone, and the European Union, slowed sharply in the last quarter.
Eurozone and EU GDP both only rose by 0.1% in October-December, down from 0.3% in July-September, dragged down by Italy (-0.3%) and France (-0.1%).Eurozone and EU GDP both only rose by 0.1% in October-December, down from 0.3% in July-September, dragged down by Italy (-0.3%) and France (-0.1%).
Economists had expected the eurozone to grow by 0.2% in the last quarter, in the face of weak global growth and trade tensions.Economists had expected the eurozone to grow by 0.2% in the last quarter, in the face of weak global growth and trade tensions.
On an annual basis, the eurozone economy is only 1% larger than a year ago -- a weak performance.On an annual basis, the eurozone economy is only 1% larger than a year ago -- a weak performance.
We don’t yet know how Germany, the region’s biggest economy, performed - that data comes out next month, as does UK GDP.We don’t yet know how Germany, the region’s biggest economy, performed - that data comes out next month, as does UK GDP.
Eurostat, which compiles the survey, adds:Eurostat, which compiles the survey, adds: