Europe Gets A Solid “B”

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What's going on?

The European Union (EU) released data on Wednesday showing that its economy’s in reasonable health – not bad, not good, just… okay. Beta blockers, anybody?

What does this mean?

Inflation (the rate at which prices of goods rise) in Europe overall was 2.1% in July, beating the European Cental Bank’s target. It was the first time inflation’s been above 2% since 2012 – which is good news, folks! On the flip side, the economy grew less than expected in the second quarter – the weakest growth in over two years. This was mostly down to high energy prices (because of rising oil prices) pushing up prices overall and squeezing household budgets.

Germany, the EU’s biggest economy, did well with unemployment at record lows (i.e. most people that wanted work were able to get it) while Spain’s performance left something to be desired, with its weakest growth in four years.

Why should I care?

For markets: Europe’s alright.

The European Central Bank’s been slowly ramping down its lavish bond purchases (a.k.a. quantitative easing – where it effectively gives the economy training wheels), aiming to get the heck outta there by the end of the year. It’s also decided to hold steady on interest rates – keeping them at record lows throughout the summer with plans to raise them in October 2019. All of this means that things will be getting pricier, eventually.

The bigger picture: Can’t you guys ever be on the same page?

While the EU’s puttering along, the US economy is booming. It grew 4% in the second quarter. That said, tensions between the two forces have been easing somewhat, which is good for both economies – the EU and the US accounts for over half of the world’s total amount of goods produced and services provided (a.k.a. its gross domestic product).

Originally posted as part of the Finimize daily email.

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