Eurozone inflation remains below European Central Bank targets

European Central Bank Frankfurt

Quarterly growth edged up from 0.5 percent at the start of the year, while year on year growth leapt to 2.1 percent from 1.9 percent, according to official figures from Eurostat.

The unemployment rate in the eurozone now stands at 9.1 per cent, down from 12 per cent in 2013, but still double the UK's current rate of 4.5 per cent. The numbers came a week after the International Monetary Fund (IMF) said the eurozone was strengthening, but warned of instability around Brexit and low inflation rates.

However, core inflation, a measure that excludes the most volatile components, namely food and energy, rose to 1.3 percent in July, up slightly from the 1.2 percent recorded in June.

With 1.041 million unemployed, Greece had the highest jobless rate in the European Union, according to Eurostat.

"All in all, the euro zone economy has rounded out the first half of the year in a very healthy state and seems to be set up nicely for continued firm growth for the rest of 2017", Bert Colijn, senior economist at ING said.




On a year-on-year basis, the seasonally adjusted GDP rose by 2.1 percent in the eurozone and by 2.2 percent in the EU28 in the second quarter, said the EU's statistical office.

He added: "Some countries have already released their first estimates of second-quarter GDP growth, showing that the expansion is broad-based within the eurozone".

"Although the exchange rate remains a key driver of export growth, manufacturers also benefitted from stronger economic growth in key markets in the euro area, North America and Asia-Pacific regions", Dobson said. Meanwhile, in Spain - where unemployment affects a larger number of people - the rate registered at 17.1 percent, down from 17.3 percent in May.

The July Eurozone flash inflation reading was unchanged from the previous month at 1.3% and was also in line with consensus forecasts.

"We anticipate core inflation remaining well short of the ECB's "below but close to 2 percent" objective, but the solid growth momentum will likely allow the European Central Bank to taper and eventually end its purchases from early next year".

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