New data and forecasts due to clarify outlook for euro zone as growth slows

NEW ECONOMIC forecasts from the European Commission and services Purchasing Manager Indexes (PMIs) will help clarify the outlook for the eurozone economy after third-quarter growth disappointed, while mid-term elections and a Federal Reserve meeting top the US agenda.

The European Union’s executive will publish its quarterly economic forecasts on Thursday for the 28 EU member countries – including Britain, which does not leave the bloc until March – and for the eurozone as a whole.

Its projections come after October 30 data showed the eurozone economy grew only half as much as expected in the third quarter.

The preliminary flash estimate of 0.2 percent was also half the 0.4 percent seen in Q2 and was the slowest pace of growth in more than four years.

The Commission’s economic sentiment index for the euro zone meanwhile dropped in October for the 10th consecutive month, and a weak flash PMI survey suggested there will be little pick-up in the final three months of 2018.

“If you look at the state of the eurozone economy, it is slowing. Last year growth was above trend and now there are lots of concerns about trade,” said Brian Giuliano, vice president of portfolio management for fixed income at Brandywine Global in Philadelphia.

In its last forecasts in July, the Commission said it expected the 19-country euro zone to grow by 2.1 percent this year, slower than the 2.4 per cent recorded in 2017, and by 2.0 per cent in 2019.

Britain will release its own third-quarter growth estimate on Friday.