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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