UK picking up steam while Europe stalls

BRITAIN is set to avoid recession but the downturn is deepening in Germany and France.

In a series of health checks on european economies, S&P Global found ‘signs of renewed momentum’ in the UK.

But it also warned of a ‘sluggish start to the year’ in Germany and a ‘depressing’ picture in France where ‘ the economy is kicking off 2024 on a slow note’.

James Smith, an economist at banking group ING, said: ‘Unlike the eurozone, the UK is picking up steam.

‘This is another signal that the consensus among economists going into this year, which suggests the UK will under-perform most major european economies in 2024, looks a bit too gloomy.’

S&P Global said its index of activity in the UK private sector, where scores above 50 show growth and scores below show decline, rose to a sevenmonth high of 52.5 in January.

Chris Williamson, an economist at S&P, said it showed Britain was ‘skirting recession’. Germany clocked up 47.1 on the index– the weakest for three months – and France hit a four-month low of 44.2.

Cyrus de la Rubia, chief economist at hamburg Commercial Bank, which compiled the reports with S&P, said that, having seen the German economy shrink last year, the update pointed to ‘a continuation of the recession’.

On France, S&P said: ‘France began the year with another marked month- on month reduction in private sector business activity. The downturn worsened in January.’

S&P said the crisis in the Red Sea, where attacks by houthi rebels on ships have hit trade, has hurt europe.

Signs of a UK recovery will be welcomed by the Tory leadership who hope tax cuts, falling inflation and lower interest rates will boost the economy ahead of the election.