GDP up by 0.3% in the Euro Area and by 0.4% in the EU

Eurostat figures have revealed that GDP rose by 0.3% across the euro area, and by 0.4% in the European Union (EU), in the fourth quarter last year compared with the previous quarter.

In comparison with quarter on quarter growth from the third quarter of last year, the data is stable, as growth rates were the same for the euro area and the EU.

Whereas GDP year on year rose by 1.6% in the euro area , and 1.8% for the whole of the EU.

For the whole of last year, growth reached 1.6% in the euro area and by 1.9% in the EU, an improvement compared with 0.9% and 1.4% respectively in 2014.

The main contributions to GDP growth, arrived from a 0.2% rise in household expenditure in the euro area, which rose further by 0.4% in the EU.

Exports also grew rose by 0.2% in the euro area and by 0.5% in the EU, while. imports increased by a wider margin, at 0.9% in the euro area and by 1.1% in all the EU member states.

The highest quarter on quarter growth figures were found in Sweden on 1.3%, Estonia, 1.2%, Poland and Romania both recorded on 1.1% growth,  while Hungary and Slovakia were both 1%.

In contrast, the largest decreases were disclosed in Croatia by 0.5%,  and Latvia 0.3%.

Out of the traditionally most powerful European economies, Germany was stable quarter on quarter with growth on 0.3%.

This figure was matched by France, who also remained on 0.3% quarter of quarter growth, while UK expanded by 0.1% to 0.5% GDP.

Euro climbs on US Dollar 

The euro has enjoyed a resurgence against the US dollar so far this morning GMT, and has reached to buying $1.10, and has been on that level for most of this morning.

Compared to yesterday, this has been a sizeable climb from buying $1.094 just before noon.

Analysts from LMAX Exchange, believe that the euro has been able to rise against the greenback, as the market has priced in an expected 10 base point reduction in bank deposit rates, at the European Central Bank’s (ECB) policy meeting in Frankfurt on Thursday.

The market is seemingly not expecting much more from the ECB, LMAX Exchange opined, even though it has been widely tipped that an expansion of their quantitative easing programme will be announced at the gathering. 

The UK pound has also appreciated against US dollar, moving up to buying $1.42 this morning GMT.

Following the euro, the pound has steadily climbed upwards against the buck, after noon yesterday sterling was purchasing $1.414.

The markets have acted positively to the statement from the Bank of England (BOE), about their plans to increase liquidity by issuing three extra Indexed Long-Term Repo (ILTR), in the weeks before and after the EU referendum on June 23.

Usually the ITTRs  is a  monthly programme, and works by allowing commercial banks to borrow liquidity from the  BOE, against the collateral of their mortgage or other assets.

The measure has been put forward, in the attempt to shield the UK economy from the potential of damaging economic uncertainty over the referendum, especially if the British public votes to leave the EU. 

Industry Production Increases in Germany by 3.3% 

According to official figures, production in German industry hiked by 3.3% for January this year.

This is a significant month on month increase, as in December the figures revealed that there had been a fall on 0.3% of production output.

Excluding energy and consumption, industry rose by 3.2%, additionally the production of capital and consumer goods escalated by 5.3% and 3.7% respectively.

There was also higher activity in the production of intermediate goods by 0.4%.

Energy production was up by 0.1% in January,  and growth in the construction industry increased by 7%.