Economic growth in the 16 countries that shared the euro in 2010 was unrevised from the initial estimate as export and consumer spending growth was offset by slowing investments and government spending, according to The Wall Street Journal. On Thursday, the European Union reported that eurozone gross domestic product grew by 0.3% in the fourth quarter, which was in-line with the initial estimate and kept the 2% year-over-year growth unchanged. Household consumption was up to 0.4% from 0.1% in the third quarter, and a separate report showed that retail sales for the region rose for the first time in 10 months during January.
The strong economic data have accelerated expectations for the European Central Bank to announce an increase in interest rates, although concerns over austerity measures could keep rates low in the near-term. On Thursday, ECB President Jean-Claude Trichet hinted that the central bank could raise interest rates as early as next month, which would be the first tightening since the financial crisis hit in 2008. Trichet said that inflation risks “are to the upside,” and said that policymakers would employ “strong vigilance” in watching inflation. He added that a rate increase at the next meeting was “possible” and called the current policy “very accommodative.”
Click here to read the story on eurozone growth from The Wall Street Journal.
Click here for coverage of Trichet’s comments, also from The Wall Street Journal.