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Brexit threat to Europe's economy too

Tuesday, July 05, 2016 - 01:44

Euro zone business growth held steady in June. But, as Sonia Legg report, the modest pace suggested economic growth in the second quarter was half the rate of January-March.

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It's not been the easiest few weeks for European economies - the Brexit vote adding a level of unwanted uncertainty. And surveys carried out before the vote aren't particularly helping, Euro zone business growth held steady in June. But the modest pace suggested economic growth in the second quarter would be 0.3 percent - half the rate of January-March (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "The price cuts that companies are undertaking across the euro zone are having some positive impact, probably not enough. The employment situation seems to be getting rather better but the ECB will want to see some sustaining of this recovery and probably some acceleration as well." Spain's service sector was one of the bright spots - firms hired faster in June than in any month since 2007. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING ABOUT SPAIN: "It is certainly in a better situation than they have been and they are kind of reflective of the wider euro zone area." In Germany retail sales on a monthly basis rose 0.9 percent after two consecutive falls, while in France, they remained flat. And private sector growth eased in Germany and stagnated in France as waves of strikes weighed on June output. Both countries will be watching Britain - where service activity slowed to a three-year low. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "The EU powers that be will very much need to steady the ship and I suspect make sure that the dialogue with the UK remains reasonably friendly so as not to destabilise any of those European economies." The ECB's key inflation target of two percent was also in the spotlight. The euro zone just escaped deflation in June, with prices up just 0.1 percent on a year ago.

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Brexit threat to Europe's economy too

Tuesday, July 05, 2016 - 01:44