Data released by a number of EU countries and the European central bank has cast a gloomy picture for the much hoped for growth.
Trade data released today by the UKs office of national statistics (ONS) has shown that the countries trade deficit has widened since January. It has risen to £8.8 billion compared to the earlier forecasts of £7.9 billion. The falling sales of cars to the US, China and Russia, among other countries, meant the deficit with non-EU countries widened significantly to £5bn, compared with forecasts of £3.9bn. Surprisingly despite the ongoing issues within the Eurozone, British exports rose slightly to those countries.
Recent data released by other European countries like Spain and Italy has not bolstered confidence. The ECB is expecting inflation to remain above 2% this year saying that the outlook for growth remains gloomy, though it expects a slight improvement in economic activity this year.
It said:“Inflation is likely to stay above 2% in 2012, mainly owing to recent increases in energy prices, as well as recently announced rises in indirect taxes. Survey indicators for economic growth have broadly stabilised at low levels in the early months of 2012, and a moderate recovery in activity is expected in the course of the year. The economic outlook remains subject to downside risks.”
The euro has fallen to a 3-month low versus sterling. €1 is now worth 82.27p. It is also falling vs the dollar, currently trading at $1.31.