Comment: Eurostat Figures – GDP Beats Expectations & Inflation Edges Up

“Figures released this morning by Eurostat, the official statistical office of the EU, bring a welcome change to the uncertainty surrounding economic markets; the FTSE anticipated this and opened 8.8 points up this morning. The Eurozone beat its growth expectations with GDP in the Euro area growing by 0.5% quarter over quarter, while inflation also edged up 1.8% month over month. However, with Brexit and other geopolitical shifts continuing to impact worldwide markets, businesses must operate with caution and seek out the necessary data that can help separate opinions from facts.

“The rise in inflation was partly driven by the upsurge of energy prices, with the cost of petroleum increasing significantly. GDP may have risen by 1.8% against 2015 figures but business leaders remain tentative in the UK – our research found that businesses had already seen Brexit damage potential growth. Half of the financial decision makers surveyed claimed they’re now more likely to leave or reduce investment in the UK, with Brexit also hurting the overall sentiment. Despite this, businesses must remain calm as negotiations will continue well past Article 50 being invoked, potentially into 2020. The Eurostat release is a small drop in the much bigger business ocean, and firms should be preparing for change in the long-term.”

Daniele Fraietta, Senior Economist, Dun & Bradstreet