European Commission Downgrades UK Growth Outlook

The euro-area economy will grow at the fastest pace in a decade this year, while the U.K. heads into an extended slowdown, the European Commission said, highlighting the increasing divergence between the continent and the British economy.Raising its 2017 forecast for the 19-country bloc to 2.2 percent from 1.7 percent in May, the EU’s executive arm cited “resilient private consumption,” and it predicted a 2.1 percent expansion in 2018. It cut its 2017 prediction for the U.K. and sees growth cooling to just 1.1 percent in 2019, which would be the worst performance since the recession of 2009.European Central Bank officials share the positive view of the economy, though they are wary of paring back their stimulus program too fast without more confidence in the inflation outlook. Executive Board member Benoit Coeure said Thursday the recovery is the strongest in almost two decades in terms of “robustness and balance.”

Source: Euro-Area Growth Forecast Lifted Again as U.K. Outlook Dims – Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.