The Autumn Forecasts for the Euro Area is looking up for the UK recovery, European Commission say.
The forecasts, announced by European Commission's Vice-President for Economic and Monetary Affairs, Olli Rehn, say the United Kingdom is showing signs of "Tangible improvements", but with some "lingering uncertainty" as investments, which saw fixed capital formation contributing positively to growth in the first half of 2013, are showing sings of a slow down with only the construction sector showing strong signs of growth in the second quarter. The commission say this highlighted the poor rate of business investment into the economy.
The report said net exports, which has been weak during the crisis have finally shown some signs of improvement "afoot", with next exports contributing 0.3 per cent. The increase, it said, was due to fall in imports and occured in the first quarter alone.
Further indices of improvement were due to growing and improving consumption, with Private consumption contributing a total of 0.5 percent of all consumption (1%) in the first half of the year; fall in inflation, even though it was at a "leisurely pace"; decline of deficits as government implement economic recovery policies; consistent employment which rose by 1.2% in 2012, although unemployment remained high at 7.9%.
The Commission Vice-President, said Greece, Portugal and Italy, show signs that confidence is returning. Although, he said, this has slowed in the past few months.
Overall for the Euro Area, the report said after six quarters of slowdown, the EU area have returned to growth, fueled by gradual recovery which has gained traction, because of decisive efforts taken early. This has now given way to slower speed of consolidation.
Despite the good news, the commission report say there are concerns that recovery will derail if agreed policy measures are not rigorously implemented both at micro(individual country level) and macro (euro-wide) level.
The other risks, say the report, are fear driven on the value of the Euro currency and uncertainty, because faster growth can be expected if policies are faithfully implemented. Whereas a slippage could worsen fears and trigger more stress on the financial sector.
There is also external variables to consider, as upheavals outside the Euro Area can lead to a rebounds and affect the EU economy.
In a nutshell, Real GDP grew by 1%, total investment during the period was 0.9%, Employment rise 1.2%; Unemployment by 7.9%; Consumer price inflation rose 2.8%; Current account balance of the GDP by -3.8%; Deficit remained with General government balance of -6.1% and General government debt 88.7" of GDP against 2011 84.3".
To read the full general forecast for the United Kingdom, please click on the coloured text below.
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Please on coloured text in capital letters >>>> to read [ .]EUROPEAN-COMMISSION'S-AUTMN-FORECASTS-UK.
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