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Eurozone Gross Domestic Product growth at 10-year high

Published: Thursday 01 February 2018

By Adrian Bishop

Economic growth in Europe has hit a 10-year high.

In 2017, Gross Domestic Product (GDP) in the 19-nation Eurozone increased by 2.5%, according to Eurostat data. This is 0.7% higher than the UK performance and 0.2 higher than the United States.

At the same time, a leaked government document suggests UK growth over the next 15 years could be up to 8% less than if Britain remained in the European Union.

After an initial dip, the pound recovered against the Euro to be at parity around midday and was generally up against most major currencies.

David Johnson, Halo Financial’s founding director, explains, “Although the Pound initially dropped on concerns over the leaked report and political worries, it rallied later.

“The 0.6% estimated rise in the Eurozone GDP during the last three months was in line with expectations, but there are still some worries that unemployment figures still need to come down further.

“That said, it is just three years since the Eurozone was grappling with the Greek economic crisis and 2017’s 2.5% gain is the best result since the 3% of 2007, before the global financial crisis.”
Growth in Quarter 4, 2017 in the euro area was 2.7% higher than Quarter 4, 2016.

The leaked Brexit assessment report claims leaving the EU will adversely hit almost every sector and every UK region, according to the Buzzfeed website.

The document “EU Exit Analysis – Cross Whitehall Briefing” and dated January 2018, looked at three of the most plausible Brexit scenarios based on existing EU arrangements.
According to the report, under a comprehensive free trade agreement with the EU, UK growth would be 5% lower over the next 15 years compared to current forecasts, according to the analysis.

The "no deal" scenario, which would see the UK revert to World Trade Organization (WTO) rules, would reduce growth by 8%. Even the softest Brexit option of continued single-market access through membership of the European Economic Area would lower growth by 2%.
These calculations do not account for the cost of adjusting the economy to new customs arrangements.

Government sources say the UK will not be worse off, and its preferred bespoke trade deal option was not analysed in the report.

Conservative Brexiteers claim the document has been leaked by those wanting the "softest possible" Brexit.

Labour is pressing for the assessment to be fully published and discussed in Parliament.

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