The combined currency bloc scraped together growth of 0.2 per cent between January and March, in line with growth in the previous quarter but this was half the expected 0.4 per cent growth, the Guardian said.
The weak performance will heap further pressure on the European Central Bank to take action to boost the flagging region, after months of speculation. Peter Vanden Houte, economist at ING, described the official data as “dismal”.
There was a huge divergence, with Germany growing at the fastest rate of all 18 countries, with GDP increasing by 0.8 per cent, double its growth in the previous quarter.
The pace of recovery also accelerated in Spain, with growth of 0.4 per cent outpacing a 0.2 per cent increase in GDP in the previous three months.
At the bottom of the pile was the Netherlands, which suffered a shock 1.4 per cent contraction in GDP and Portugal’s economy shrank by 0.7 per cent.
France didn’t see any growth at all and Italy’s economy grew by 0.1 per cent in the first three months of this year.
According to the Financial Times, poor eurozone data drove investors to retreat from stocks in Asia yesterday (15 May).
US and European investors responded to the data by “switching into top-tier government bonds. Investors in Asia, similarly spooked by stuttering growth in a market on which the region relies on to buy its exports, began their day dumping shares”, the FT said.
Japan’s Topix index was down 1.7 per cent in early morning trading, while Korea’s Kospi slipped 0.5 per cent. Hong Kong also opened lower, with the hang Seng Index down 0.4 per cent.
Mario Draghi, ECB president, and other policy makers including Bundesbank president Jens Weidmann, “have dropped hints in recent weeks that they are ready to act against inflation”, which at 0.7 per cent is less than half its near-2 per cent target.
UK wealth unchanged since recession
The proportion of wealth owned by the top 10 per cent of UK households has “barely changed compared with the years before the recession”, and still stands at 44 per cent, the Financial Times reports.
The figures released by the Office for National Statistics revealed that in 2012, 22 per cent of households aged 55-64 had wealth in excess of £1m – up from 16 per cent before the crisis.
Private pension savings now account for the largest proportion of household wealth – 38 per cent compared to 37 per cent for property. By contrast, 14 per cent of those aged 25-34 have assets of less that £12,500.
The figures also point to the “widening wealth gap” between London and the rest of the country, with household wealth in the capital rising more than five times faster than the English average in the six years between 2006 and 2012.
AstraZeneca CEO warns on Pfizer’s tax avoidance
Pascal Soriot, the chief executive of AstraZeneca, has warned that the British drugs group “could be damaged” by Pfizer’s tax avoidance plans, the Guardian reports.
Pfizer, which has proposed a £63bn takeover of the UK business, intends to use the AstraZeneca deal to “relocate its tax base to the UK”.
The move is designed to move away from the US’s higher rate of corporation tax, “but US Democratic senators angered by the strategy have expressed determination to close this legal loophole”.
Lloyds chair warns on Scottish independence
According to the Telegraph, Lloyds Banking Group has warned that the consequences of Scottish independence are largely unknown, saying the “bank has no plan for what would happen if the Scottish people vote to secede”.
At yesterday’s annual general meeting in Edinburgh, Lord Blackwell, the bank’s new chairman, said that “there are clearly some uncertainties in terms of what a vote for independence would mean” and that it is “impossible to speculate how compliance, regulation and governance would work”.
When questioned about Lloyds’ contingency planning in the event of a ‘yes’ vote, Lord Blackwell said the bank does not have a strategy but warned the situation “was a potential risk for financial institutions”.
