UK bounces back as eurozone falters

THE outlook in the eurozone has ‘darkened dramatically’, but Britain is bouncing back from a slow start to the year.

Businesses in the EU have suffered their worst month for a year and a half.

The German and French economies are both slowing while Italy remains stuck in the doldrums, according to research group IHS Markit.

By contrast, the British economy has picked up pace and looks set for growth of up to 0.4 per cent in the second quarter of the year, following expansion of just 0.1 per cent in the first three months. Chris Williamson, chief business economist at Markit, said: ‘With the economic indicators turning down at the same time as political uncertainty has spiked higher, the eurozone’s outlook has darkened dramatically compared to the sunny forecast seen at the start of the year.’

Brexit campaigner John Longworth, the former-director general of the British Chambers of Commerce, said: ‘The recent slowdown of growth in the UK appears to be reversing with strong growth in prospect, while a short-lived expansion in the EU is petering out.’

Markit said its index of activity in the British economy – where scores above 50 show growth – rose from 53.2 in April to 54.3 in May as the manufacturing and services sectors strengthened.

That was the best performance so far this year and suggested the economy is picking up pace after a slow start. The equivalent score in France fell to a 16month low of 54.2 while the German reading dropped to a 20-month low of 53.4. Italy held firm at 52.9.

Spain was the only one of the biggest four economies in the eurozone to perform better than Britain, with its index of activity at 55.9.

The EU grew by 2.5 per cent in 2017 – its best performance for a decade and better than the 1.8 per cent expansion seen in the UK.

But unemployment in the eurozone remains painfully high at 8.5 per cent, more than double the 4.2 per cent rate in the UK.