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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

France records fastest growth in 52 years; German economy shrinks; US consumer confidence sinks – as it happened

United States
The skyline of Paris, the French capital, including the Eiffel Tower.
The skyline of Paris, the French capital, including the Eiffel Tower. Photograph: Vincent Isore/via ZUMA Press/REX/Shutterstock

Afternoon summary

Time to wrap up.

The eurozone’s two largest economies had a very different end to 2021, as the region’s recovery from the pandemic continued.

France beat forecasts with 0.7% growth in the last quarter, helping it rack up its best annual growth since 1969.

But Germany stumbled, with a 0.7% contraction in Q4 which puts it on the brink of recession, as the latest wave of Covid-19 and supply chain problems disrupted activity.

That took the shine off otherwise-decent economic numbers from the eurozone, with Sweden and Spain also expanding solidly.

US consumer confidence has been knocked by rising inflation, and worries about the economic outlook.

European stock markets have closed in the red, with their fourth weekly fall in a row.

Here are today’s other main stories:

Goodnight, and have a lovely weekend. GW

Updated

After a very challenging Christmas, UK pubs are hoping for a much-needed pick up in businesses as Plan B restrictions are lifted, and drinkers put Dry January behind them. and head back to the bar.

My colleague Rob Davies reports:

In its nearly 500-year history, Ye Olde Mitre in Holborn has served beer under 21 monarchs, survived the English civil war and emerged unscathed from the Great Fire of London.

But few events have affected the pubs trade quite so profoundly as the Covid-19 pandemic.

Lockdowns choked off trade for months at a time. Even once venues reopened, social distancing restrictions and work-from-home guidance left city centres deserted and ruined the key Christmas period.

“We’re a real ale house so people come from far and wide for our beers: regulars, office workers and tourists,” said Judith Norman, the historic pub’s landlady.

“Our regulars tried to support us through the pandemic but with working from home we were a lot quieter than normal.”

At Fuller’s, the pub chain that owns Ye Olde Mitre, trade was down by as much as 70% at some of the city centre venues that rely heavily on after-work drinkers. Some had to shut their doors temporarily.

Now though, as plan B restrictions in England are eased, hope is returning at Ye Olde Mitre and elsewhere. Familiar faces are gradually resurfacing, dropping in for a pint after the odd office day here and there.

“They’re easing themselves back in and we’re hoping they’ll return full time next week,” Norman said.

Here’s Rob’s full story:

European stock markets also racked up fresh losses tonight.

The Stoxx 600 fell around 1%, meaning the index of European stocks has now posted its fourth weekly loss in a row.

German’s DAX lost around 1.3%, with the mood in Frankfurt not helped by this morning’s GDP report. France’s CAC fared better, down 0.8%.

David Madden, analyst at Equiti Capital, says it was another painful day on the markets.

Continued concerns about the possibility of several interest rate hikes from the Federal Reserve and the Russia-Ukraine standoff is weighing on the mood once again. On Wednesday, Jerome Powell, the Chair of the Federal Reserve didn’t rule out the possibility of raising interest rates seven times this year.

That message has set the scene for next week’s updates from the Bank of England (BoE) and the European Central Bank (ECB). Last month, the BoE caught many off guard when it hiked interest rates, and there is chatter the bank will look to lift rates a few times this year. The ECB is unlikely to be raising rates anytime soon, but if the other major central banks are heading down that route, it could influence the language of the ECB.

FTSE 100 closes lower

After a turbulent week, the UK’s stock market has racked up another day of losses.

The FTSE 100 index has closed 88 points lower at 7466, down 1.2% today.

The FTSE 100 this year
The FTSE 100 this year Photograph: Refinitiv

Online grocery firm Ocado led the fallers, tumbling 7.5%, after its Norwegian rival AutoStore claimed a victory in one of their ongoing legal battles - something Ocado disputed.

Mining companies also fell, suggesting concerns that global growth could weaken - especially if America hikes interest rates swiftly. Copper producer Antofagasta lost 3.9%, followed by Anglo American (3.7%), and Rio Tinto (-3.5%).

Financila stocks also weakened, with Barclays down -3.3%.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, says:

Some of the UK’s biggest companies, including major financial firms, have seen their share prices rocked. Investors are likely being unnerved by a combination of rising Ukraine tensions, as well as further speculation about the extent and timing of interest rate increases.

The ongoing PR disaster in Downing Street is likely to be doing little to prop UK sentiment up either.

Archant, the publisher of dozens of titles including the Eastern Daily Press, London’s Ham & High Express and the former owner of the anti-Brexit weekly the New European, is up for sale only 18 months after being sold to a private equity group.

The Norwich-based newspaper group, one of Britain’s oldest publishers – co-founded in 1845 by the mustard magnates the Colman family – was sold to the investment group Rcapital in August 2020 in a deal that promised a “bright future” for the company as the pandemic accelerated the decline in its already strained finances.

US and Eu pledge energy security cooperation

With the Ukraine crisis bubbling, US President Joe Biden and his European Union counterpart Ursula von der Leyen have pledged to cooperate on guaranteeing Europe’s energy security.

In a joint statement, von der Leyen and Biden said they would work together to ensure Europe remained supplied with gas:

“The United States and the EU are working jointly towards continued, sufficient, and timely supply of natural gas to the EU from diverse sources across the globe to avoid supply shocks, including those that could result from a further Russian invasion of Ukraine.”

Russia is Europe’s largest supplier of gas, of which a third flows through Ukraine’s gas pipelines to countries across the continent.

Analysts have warned that there isn’t much slack in the system. With demand increasing, there’s little spare gas to go around.

US consumer confidence falls

Consumer morale across the US has dropped to its lowest level in over a decade, as the Omicron wave, and rising prices, weighed on the recovery.

Sentiment soured this month, according to the University of Michigan’s healthcheck, as worries about inflation and the state of the economy rose.

The index of consumer sentiment fell to 67.2, from 70.6 in December, with people less upbeat about current economic conditions and future prospects.

Confidence in government economic policies also fell, which could worry the White House ahead of the mid-term elections this November.

Survey of US consumer confidence

Surveys of Consumers chief economist, Richard Curtin warned that consumer sentiment has been slumping after a brief interlude of rising optimism last year:

The Delta and Omicron variants were largely responsible, but other factors, some of which were initially triggered by covid, have become independent forces shaping sentiment.

While supply chains and essential workers have sparked the initial increases in prices and wages, a wage-price spiral that has subsequently developed is no longer tied to those precipitating conditions. Household spending had been supported by an extraordinary pace of rising home and stock prices that is likely to turn negative in the year ahead.

Overall confidence in government economic policies is at its lowest level since 2014, and the major geopolitical risks may add to the pandemic active confrontations with other countries.

Here’s some reaction:

The New York Stock Exchange .
The New York Stock Exchange . Photograph: Spencer Platt/Getty Images

Stocks are lower in New York, as the last session of a rather turbulent week gets underway.

The Dow Jones industrial average has lost 275 points, or 0.8%, as most sectors drop in early trading.

Construction equipment maker Caterpillar (-3.4%), oil major Chevron (-3.4%) , and conglomerate 3M (-3.3%) are leading the Dow fallers.

Tech though, is holding up better, with Apple jumping 2.8%. It beat forecasts last night with record sales in the holiday quarter, partly thanks to high iPhone demand in China

The Nasdaq composite has dipped by 0.4%.

Updated

US wages and salaries rose by 1.1% in the last quarter of 2021, the Bureau of Labor Statistics reports.

That’s a slight slowdown from the summer, but still high by historic standards:

So with prices also rising sharply, but spending weakening last month (as the PCE index shows) America’s central bankers face a conundrum.

Paul Ashworth of Capital Economics explains:

The employment cost index shows that overall compensation costs increased by 1.0% in the fourth quarter, which pushed the annual growth rate up to 4.0%, from 3.7%.

We’re more interested in wages & salaries for private workers, however, which increased by 1.2%, with the annual growth rate hitting a 40-year high of 5.0%, from 4.6%. Even with the unexpectedly strong fourth-quarter GDP gain indicating that productivity growth was a little stronger than we had anticipated, 5% wage growth is nowhere near consistent with a 2% price inflation target.

Elsewhere, we also learned that the annual rate of PCE inflation increased to 5.8% in December, from 5.7%, with the core PCE rate rising to 4.9%, from 4.7%. The latter is also the highest rate since the early 1980s. With both wage and underlying price inflation spiraling out of control, no wonder the Fed is a lot less confident that this surge will be short-lived.

US PCE inflation highest since 1980s

A closely-watched index of the cost of living in the US has risen again, to its highest rate since the early 1980s.

The PCE price index, which monitors changes to personal consumption prices, rose by 5.8% year-on-year in December, as the cost of goods and services kept rising. That’s up from 5.7%, and the highest since 1982.

Energy prices surge by 29.9%, while food prices increased 5.7% -- as the inflationary squeeze continued.

Excluding food and energy, core PCE price index increased by 4.9%, the higher core inflation rate since 1983. This highlighting the inflationary concerns that could spur the US Federal Reserve to raise interest rates in March.

In December alone, PCE rose 0.4%. US personal incomes rose by 0.3% during the month, meaning that incomes are not keeping up with rising prices.

Consumer spending dropped 0.6%, after stronger demand in November due to Black Friday and early Christmas shopping.

Updated

Here’s our news story on HP’s court win over Mike Lynch:

Germany's economy shrinks: what the experts say

Germany faces an increased risk of falling back into recession, after its GDP contracted by 0.7% in the October-December quarter.

The fourth wave of the pandemic, new restrictions and high energy prices were a harder hit to the economy than expected, says Carsten Brzeski of ING:

The German economy went into hibernation at the turn of the year. New restrictions to tackle the fourth wave of the pandemic and the Omicron wave as well as higher energy prices dented private consumption.

With this weak fourth quarter, the likelihood of Germany being in an outright recession at the turn of the year has increased. High energy prices will continue weighing on private consumption, even if social restrictions are lifted in the coming weeks. Also, even with some temporary relief from exports and industrial activity, the Omicron wave in Asia and the Chinese New Year clearly argue against a steep short-term improvement in supply chains.

Maybe the German economy gets away with only one black eye and there won’t be a part two to the winter recession story, but in any case, the short-term outlook doesn’t look too good.

For a technical recession, Germany’s GDP would have to shrink in the current quarter (January-March).

Mihir Kapadia, the CEO of Sun Global Investments, says Germany was hit hard by Omicron, so could recover if we avoid further variants:

The ongoing supply chain bottlenecks are also a symptom of the Q4 lockdowns, and barring any fresh new waves or variants, Q1 2022 should be marked down for recovery.

Hopefully, investor angst of Q4 21 will be replaced with optimism for Q1 22, as France, Sweden and Spain have demonstrated a stellar rebound.

With Germany being a manufacturing heavyweight, the supply chain bottlenecks have had a higher impact. The real focus should be on controlling inflation both in Europe and the US.

The contrast between Germany and France is a dilemma for policymakers, says Raffi Boyadjian of XM:

The euro has plunged below $1.12, brushing fresh 20-month lows on Friday. Upbeat GDP numbers out of France today contrasted sharply with a bigger-than-expected contraction of the German economy in Q4.

This poses a possible dilemma for the European Central Bank when it meets next week as it tries to strike a policy balance for all Eurozone members amid soaring price pressures.

Wall Street is heading for further losses, with the benchmark S&P 500 index down 1% in pre-market trading.

Back on UK inflation... Jack Leslie, senior economist at the Resolution Foundation, says this morning’s more detailed data shows the importance of addressing the cost of living crisis:

“While the new ONS figures confirm that the average inflation rates experienced by different income groups are currently similar, they also highlight again how low income families experience inflation in a different way.

“On average the lowest income families spend twice as much on food and housing bills as the richest families. So increasing food price inflation and the looming energy price cap rise in April will disproportionately affect families already struggling to get by. These families should be the priority for the Government’s cost of living crisis response.”

European stock markets are on track for their fourth weekly drop in a row, as part of a global rout this month.

Reuters explains:

The pan-European STOXX 600 tumbled 1.5% in morning trading, on course for its fourth straight weekly drop, while U.S. futures were pointing to more crimson screens on Wall Street later too.

MSCI’s 50-country main world index is now down over 8.1% for the month, which will be its worst January since the 2008 global financial crisis year.

HP wins majority of civil case against UK tech tycoon Mike Lynch

Just in: Hewlett-Packard has won the majority of its civil case against British tech tycoon Mike Lynch over its acquisition of Autonomy in 2011, my colleague Rob Davies reports.

London judge Mr Justice Hildyard has announced his ruling, and says that damages are likely to be considerably less than the $5bn which HP claimed.

The decision follows years of bitter dispute between HP and Lynch.

Autonomy developed technologies to help firms sort through unstructured data to find meaning and value, such as information contained in web pages, corporate presentations, videos clips, e-mails and instant messages.

HP bought Autonomy for $11bn in 2011, as it looked to expand its software operations. But in 2012, it took an $8.8bn (£5.5bn) writedown, saying that it had discovered “serious accounting improprieties” at Autonomy.

Separately, Priti Patel, UK home secretary, must decide today whether to approve Lynch’s extradition from Britain to the US to stand trial in the US on criminal fraud charges, over the sale of Autonomy to HP.

Britain’s poorer and richer households are facing similar rates of inflation, the Office for National Statistics reports.... but there’s more to the story than that.

ONS experimental data released this morning shows that, despite different spending patterns, the cost of living rose broadly across income brackets.

The ONS estimates that low-income households in December experienced annual consumer price inflation of 5.3%, while high-income households saw inflation of 5.5%.

However.... the ONS is still working on broadening its inflation work, to give a much clearer view of how prices are rising.

Due in May, it will use supermarket scanning data to show price moves in granular details, after campaigners warned that CPI data isn’t capturing the cost-of-living squeeze for the poorest.

The ONS says today:

  • High-income and low-income households have experienced similar annual inflation rates since 2014.
  • High-income households’ experience of inflation is being driven by rising transport costs, on which they spend a larger proportion of their expenditure when compared with low-income households, while for low-income households housing-related costs are more of a factor.
  • Retired and non-retired households have experienced similar levels of inflation rates since April 2021.

But, it doesn’t mean that inflation causes equal pain across society. If you don’t have savings, and are already struggling, then an increase in food or energy bills is a bigger problem.

And more affluent families can cut back on discretionary purchases which aren’t even an option for others.

As Andy Bruce of Reuters points out in this Twitter thread:

Stian Westlake, chief executive of the Royal Statistical Society, has welcomed today’s data from the ONS, but agrees that the current data doesn’t show the personal impact of inflation:

“Today’s release of CPI data for different household groups by the ONS is a useful and welcome interim step but is not the long term answer . Apart from the hugely important question of whether inflation is hitting poorer households more than rich ones, Jack Monroe has done a great service in reminding everyone that a key point of consumer price indices is to measure inflation as actually experienced by households. While these changes will go some way to better capture household costs, the issue remains that CPI was never intended for this precise purpose.

“The Household Cost Indices (HCIs), currently being developed by the ONS and due for release in May, are designed to reflect household experience. They include items such as mortgage and other interest payments, student loan repayments and unlike most consumer price indices including CPI, are not skewed towards higher spending, richer households. Much more attention needs to be paid to and resources devoted to, their development as they can provide the long term answer to what Jack Monroe and others are rightly asking for.”

Jack Monroe, who has warned that supermarkets have been eliminating their cheapest ranges, reports:

Updated

Denise Coates, head of gambling empire Bet365, was Britain’s biggest taxpayer last year, according to the Sunday Times Tax List released this morning.

The Coates family paid an estimated £481.7m, topping the annual ranking of billionaires’ tax payments for the third consecutive year. While the family’s tax payment was down from £573m in 2020, it was still almost £200m more that paid by hedge fund manager Chris Rokos in second-place with a £300m payment to the exchequer.

The total tax paid by the top 50 taxpayers rose by £510m to £3.7bn up from £3.2bn the previous year. The minimum amount of tax paid needed to make the top 50 rose to £15.2m, up 16% on the previous year.

British firms have been urged to bolster their digital security over concerns of possible Russian cyber-attacks linked to the growing political crisis over the conflict in Ukraine.

The National Cyber Security Centre (NCSC), a part of the GCHQ intelligence agency, has updated its guidance telling firms to “build resilience and stay ahead of potential threats”.

The NCSC said:

“UK organisations are being urged to bolster their cybersecurity resilience in response to malicious cyber-incidents in and around Ukraine.”

The NCSC said that although it was investigating malicious cyber-incidents in Ukraine, “which are similar to a pattern of Russian behaviour seen before in previous situations”, it was not aware of any “specific threats” to UK organisations.

Updated

Markets head lower

European stock markets have fallen deeper into the red, as market volatility continues.

The FTSE 100 index is now down 1.2%, or 93 points, at 7462 points.

Germany’s DAX has fallen 1.7%, after its economy shank more than expected in Q4, while France’s CAC is 1.4% lower despite better-than-expected GDP data this morning.

Auto shares are weaker, after Swedish truck maker Volvo (-3.5%) reported lower fourth-quarter core earnings this morning, and proposed a smaller-than-expected dividend.

Tech stocks are being hit again, on concerns that America’s central bank will tighten monetary policy sharply this year.

It’s been a very choppy week, dominated by the Federal Reserve’s meeting earlier this week, as Jim Reid of Deutsche Bank says:

Yesterday saw another market whipsaw as markets continued to try to digest the aftermath of Chair Powell’s press conference. In particular, there was growing speculation that the Fed would embark on back-to-back hikes in order to get inflation under control, with Fed funds futures now pricing 2 full hikes over the next two meetings in March and May, in line with our US econ team’s updated call.

Assuming this is realised, then this would be a much faster pace of hikes than anything seen over the last cycle, when the initial hike in December 2015 wasn’t followed by another for an entire year, and the fastest things got was a consistent quarterly pace when the Fed hiked 4 times in 2018. This time, we almost have 4 hikes priced between March and September alone.

Updated

Euro zone economic sentiment has deteriorated, pulled down by a more downbeat sentiment in the two key sectors of industry and services.

The European Commission’s monthly economic sentiment index has dropped to 112.7 points this month, down from 113.8 in December.

That takes economic confidence away from the highs seen in 2021, before the Omicron wave hit the economy.

Eurozone economic and consumer confidence
Eurozone economic and consumer confidence Photograph: European Commission

Confidence dropped among industrial companies, with managers reporting a small drop in order books.

Service sector confidence decreased strongly again, dragged down by managers’ less positive views on the past business situation and past demand

Consumer confidence also fell, due to rising pessimism about people’s future financial situation, and especially the general economic situation.

Germany’s statistics body has also reported that goods exports to the UK fell last year.

German companies sold €65.4bn of goods to the United Kingdom during 2021, Destatis says. That’s a drop of 2.5%, on top of the 15.3% tumble in 2020 when global trade was ruptured by the pandemic.

It says:

One year after the United Kingdom left the European Union, German exports to the UK continued to decline.

Based on first provisional results, the Federal Statistical Office (Destatis) reports that Germany exported goods to the value of 65.4 billion euros to the United Kingdom in 2021.

Compared with 2020, exports to the United Kingdom decreased further by 2.5% in 2021 as a result of the Brexit, following a year-on-year decline of 15.3% in 2020, the year dominated by the Covid-19 pandemic.

The data for the entire year 2021 are based on a first release of the export figures available for December 2021.

Destatis doesn’t say how trade with other countries fared in December.

But earlier data shows that in the first 11 months of the year, German exports to all other countries had jumped 13.8%.

Exports to EU members were 17% higher in January-November than a year ago, with exports to non-EU members up 10.1%, while UK exports were down 2%.

German trade data
German exports to non-EU countries since the start of 2020 Photograph: Destatis

Updated

Some snap reaction to the German GDP report:

German economy contracted in Q4

Germany’s economy shrank in the last quarter, as restrictions to slow the pandemic hit its recovery.

German GDP contracted by 0.7% in Oct0ber-December, a sharper downturn than the 0.3% fall expected, new government figures show.

Germany was hit by a wave of Covid-19 cases in the last quarter, which led to a lockdown of unvaccinated citizens in early December, followed by wider limits on social contacts.

Also, its factories have been suffering from the ongoing supply chain crisis, which has hit supplies of key components such as computer chips.

Investors are on “high alert” this morning after another blustery session yesterday which saw stocks oscillate, says Richard Hunter, head of markets at interactive investor:

Geopolitical tensions remain on simmer, with some discussion between the US and Russia offering hope amid the build up of Russian troops along the Ukrainian border. Given the fragility of sentiment already in evidence in most global markets at present, any developments are likely to cause a sharp reaction across markets as investors digest the implications of the latest moves.

Despite the general investment gloom, the FTSE 100 has continued to carry the torch for progress. The index has begun to emerge as something of a haven asset in the first few weeks of the year, after being shunned by international investors for some considerable time as greater growth prospects were seen elsewhere.

The UK is not immune from the volatility being seen elsewhere and growth is currently pedestrian.

So far this year, the UK’s FTSE 100 index is up around 1.6%, while Germany’s DAX is down 3.5% and the US S&P 500 has tumbled by 9%.

Markets drop

European stock markets have dropped at the start of trading, despite the better-than-expected growth data this morning.

The pan-European Stoxx 600 index has slipped by 0.4%, as anxiety over looming US interest rate rises continue to weigh on markets.

The UK’s FTSE 100 has dropped by 45 points, or 0.6%, with financials, real estate firms, and consumer non-cyclicals lower.

The CAC index of France’s leading companies is holding up slightly better, down 0.13%.

Luxury goods maker LVMH has jumped 3.8% in Paris, after yesterday reporting fresh sales and profit records last year driven by booming demand in the US and China.

European stock markets
European stock markets Photograph: Refinitiv

Spanish GDP grew 2% in Q4

Spain’s economy has also beaten expectations.

Spanish GDP grew by 2% in the last quarter of 2021, rather better than the 1.4% growth which was expected.

That follows a 2.6% expansion in Q3, as Spain continued to recover from the pandemic in the face of supply chain problems and surging energy prices.

Reuters adds:

Over the course of 2021, output expanded by 5% after a historic 10.8% slump the previous year, the National Statistics Institute (INE) data showed, marking the fastest growth since 2000 but undershooting the government’s 6.5% target.

Updated

Claus Vistesen, macroeconomist for Pantheon Macroeconomics, tweets:

Over to Sweden.... and its economy has grown strongly in the last three months of 2021.

Swedish GDP grew by 0.3% in December, and by 1.4% during the fourth quarter, faster than expected.

That left the economy 7% higher in December than in the same month a year ago.

For the fourth quarter as a whole, GDP grew by 6.2% compared with the same quarter a year ago.

Melker Loberg, economist at Statistics Sweden, says:

“The year ended with continued growth in December following a quarter with steady development throughout the period.”

Analysts in a Reuters poll had forecast growth of 1.0% and 5.4% respectively.

Swedish GDP
Swedish GDP Photograph: Statistics Sweden

The data doesn’t capture the full impact of Omicron, though, which hit Europe at the end of last year. Earlier this week Sweden’s health minister, Lena Hallengren, extended pandemic curbs by another two weeks because of “an extremely high level of spread”, meaning bars and restaurants must continue to close at 11pm.

French finance minister Bruno Le Maire has hailed the growth figures.

Le Maire told France 2 television (via Reuters):

The French economy has rebounded spectacularly and that’s erased the economic crisis.

“There are still some sectors that are still having trouble, like tourism and hotels, but most are recovering very strongly and that’s creating jobs.”

Introduction: French economy rebounds with rapid recovery in 2021

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

France has posted its strongest growth in over 50 years, as the economy recovered from the economic shock of the pandemic.

French GDP expanded by 7% last year, data just released shows - the strongest annual expansion since 1969, as the economy showed resilience in the face of supply chain disruption.

It follows an 8% contraction in 2020 as lockdowns and restrictions to fight Covid-19 drove the economy into deep recession.

French annual growth
French annual growth up to 2020 Photograph: World Bank

The strongest boom in a generation is a boost to Emmanuel Macron’s economic credentials, ahead of April’s presidential election in which he is widely expected to run for a second term.

France’s economy grew by 0.7% in the last quarter, faster than expected, but slower than the 3.1% growth in July-September as the latest wave of infections hit Europe last autumn.

Consumers helped the recovery, with household spending rising by 0.4% in the quarter following the relaxation of restrictions earlier in 2021.

Business investment, or gross fixed capital formation (GFCF), expanded by 0.5%, mainly lifted by spending on IT services

Statistics body INSEE says France’s economy has now expanded ‘significantly’ past its pre-crisis levels, having returned to its pre-pandemic level of gross domestic product in Q3.

After returning to its pre-crisis level in the previous quarter (+0.2% compared to Q4 2019), GDP exceeded it significantly in Q4 (+0.9% compared to Q4 2019).

French GDP
French GDP Photograph: INSEE

Growth data from Spain and Germany are also due this morning, showing how some of Europe’s largest countries fared in Q4.

We already know the US finished last year strongly. Data yesterday showed America’s economy expanded by 1.7% during the last quarter (or 6.9% annualised).

US GDP expanded by 5.7% during 2021 -- the best growth annual growth since 1984, lifted by government and central bank stimulus and vaccine rollouts.

The agenda

  • 6.30am GMT: French Q4 GDP report
  • 7am GMT: Swedish Q4 GDP report
  • 8am GMT: Spain’s Q4 GDP report
  • 9am GMT: Germany’s Q4 GDP report
  • 10am GMT: Eurozone consumer and economic sentiment report
  • 1.30pm GMT: US PCE index of personal consumption price rises
  • 3pm GMT: University of Michigan’s index of US consumer confidence

Updated

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