Eurozone Growth Remains Subdued During Opening Quarter of 2016

Economic expansion in the euro area has increased for the first time in three months in March, according to financial information company Markit, but the growth rate was negligible.

Their Purchasing Manager’s Index climbed to a score of 53.1, with 50 being neutral, a slender improvement of 0.1 month on month, compared to the 53 score in February, but was below a previous flash estimate of 53.7.

Markit said that  0.5 of the 0.6 downward reading from the flash estimate, was down to the combination of poor performances from France and Italy.

Manufacturing accelerated at a faster pace in March, but the survey found that this was offset by a slower growth rate in service industries, and both sectors saw weaker levels in job creation.

The average of the output index over the opening quarter as a whole reached 53.2, which was the weakest registered since the fourth quarter of 2014.

Downward pressures on prices remained in March, with output charges falling for the sixth consecutive month.

This was a reflection Markit believed of the fall in demand, coupled with the increase in price competition.

While a sharp reduction in manufacturing prices purchases, was in contrast to a mild increase in service sector input costs.

Ireland and Spain both saw the fastest rates of growth in March, and received accelerated levels of new work growth, and solid job creation.

There was less positive news for Germany, as the PMI found that growth had been reduced to its slowest pace for eight months.

As manufacturing production increased only at a modest pace, with service sector activity growth falling.

Markit’s euro area business activity index revealed that growth has been slow in the first quarter of this year.

The index reached in March 53.1, but this was down from the 54.2 recorded in December last year.

In a similar trend to the PMI, the lack of progression in the French and Italian economies was the main reason for the lack of business growth.

Volume of Retail Trade up by 0.2% in Euro Area

Eurostat figures have revealed that retail trade in the euro area has increased by a month on month 0.2% in February.

Although across the whole of the European Union (EU), retail activity fell by 0.1%.

Compared to January, the rise was slightly less as business in retail grew by 0.3% in the euro area, but more significantly business grew by 0.7% in the EU.

Year on year, the calendar adjusted retail sales index rose by 2.4% in the euro area and by 3.0% in the EU.

In the euro area, the increase of 0.2% in February was mainly attributed to  a rise of 0.5% for food, drinks and tobacco, while both non-food products and automotive fuel decreased by 0.2%.

The 0.1% decrease in the volume of retail trade recorded in the EU, is due to decreases of 0.4% for automotive fuel, and of 0.3% for non-food products, while food, drinks and tobacco rose by 0.2%. 

UK Pound falls against US Dollar 

So far this morning GMT, the GBP/USD rate has fallen in favour of the greenback, as the pound fell from buying $1.428 in the early hours of today, to currently purchasing $1.42.

Standard & Poor have also warned that Britain leaving the EU could threaten the country’s credit rating, leading to a downgrading from its premium AAA rating.

The rating agency are convinced  that a ‘Brexit’ would have a negative effect on the UK economy.