Eurozone falls into double-dip recession amid pandemic – as it happened

Graeme Wearden

from on 2021-04-30 16:04 (#5H8N1)

Rolling coverage of the latest economic and financial news

Latest: Eurozone shrank 0.6% in January-March, meaning double-dip recession
Germany shrank 1.7% in Q1
Italian GDP down 0.4%
Spain's GDP fell 0.5% in January-March
Intro: French GDP grew 0.4% in first quarter of 2021
Yesterday, US GDP grew by 1.6% (6.4% annualised)

5.03pm BST

Time to wrap up, after a blizzard of GDP reports and other economic data.

Here's all today's stories:

*** Reminder*** UK equities will be closed Monday due to the early May bank holiday

4.57pm BST

In the City, the FTSE 100 has ended the day 8 points higher at 6970 points, a gain of 0.12% today.

That means it rose around 3.8% in April as a whole, making April the best month since November 2020 (when vaccine success from Pfizer, then Moderna, triggered a major rally).

4.12pm BST

Looking back at the eurozone recession....Shweta Singh of TS Lombard has predicted that the downturn has bottomed out this month, meaning a recovery can begin in May.

She points out that Europe has suffered a sharp downturn from the pandemic:

The drop in economic activity last quarter came on the back of surging new infections and stricter restrictions. With real GDP 5.5% below the pre-pandemic level, EA output losses been some of the largest amongst developed markets.

The decline in economic activity was the steepest in Germany, falling by 1.7% in Q1.

Following a bleak start to the year, the euro area will (re)enter a recovery phase from next month as the pace of vaccination gathers pace and restrictions are dialled back. Pent-up household demand will boost growth as consumers tap into their forced savings.

Tourism should offer a decent tailwind. Fiscal spill overs from a generous fiscal package in the US will also offer support as will the Recovery Fund, which should kick-start later this year. Export orders are buoyant, suggesting more room for growth in manufacturing and exports.

3.34pm BST

Yet more evidence that the US economy is strengthening: consumer confidence has jumped this month to a pandemic high, according to the University of Michigan's survey:

.@umisr's monthly Consumer Sentiment Index rose to 88.3 in April 2021, up from 84.9 in March & well above last April's 71.8-the best reading since the start of the pandemic.

The renewed confidence is due in part to record federal stimulus spending.https://t.co/wLGz2bhFyZ

Uni Michigan #Consumer Sentiment index +3.4pt to 88.3 in April

Current Conditions: 97.2 (+4.2pt)
Consumer Expectations: 79.7 (+3pt)

"Growing sense that upward momentum in jobs & incomes will persist... record stimulus spending & positive impact from #vaccinations" Curtin pic.twitter.com/CCJGYjdqDX

3.09pm BST

Oof! Economic activity in the Chicago region has surged this month -- further underlining how the US is outpacing Europe.

The Chicago Business Barometer has jumped to 72.1 in April, the highest level since December 1983.

Demand improved markedly in April with New Orders rising by 9.9 points to a near-7-year high. Production ticked up 0.9 points to the highest level since January 2018.

Anecdotal evidence suggested an anticipated increase in business activity, partly because firms are overbuying due to raw material shortages. Order Backlogs soared, up 16.2 points in April, hitting the highest level since December 1973. Firms are experiencing difficulties in getting certain components and raw materials.

Prices paid at the factory gate skyrocketed a further 11.1 points in April, surging to a 41-year high. Raw material shortages and transportation problems continue to weigh on companies cost burden.

MNI Chicago April Biz Barometer rises to near 38-year high as the headline Index jumps to 72.1 from 66.3* in March

#chicagopmi #MNI #chicagoreport #ISM #chicagoISM

*rounding pic.twitter.com/NH1MtT3K3b

Chicago PMI Highest Since 1983 https://t.co/K1y8sBm5sN Real Macro pic.twitter.com/e3BLJF5dQS

2.50pm BST

In New York, stocks have opened a little lower on the final trading day of April, after some record highs this week.

The PCE index rose 0.5% in March and accelerated at a 2.3% pace from a year ago. That is the warmest pace of overall inflation since 2018. A sharp deceleration prices at the onset of the crises a yr ago is distorting annual %.

U.S. stocks slide at open after lackluster China and Europe data https://t.co/Cl1ZiJpnJ2

2.26pm BST

Back in the UK, the Co-operative Group is to stop selling plastic bags for life".

Why? Because shoppers only use them only once, meaning have become as big a problem as the single-use carriers they replaced.

With more than 1.5 billion bags for life" sold each year Jo Whitfield, the chief executive of Co-op Food, said plastic pollution was a massive issue" for retailers. Many shoppers are regularly buying so called bags for life" to use just once and it's leading to a major hike in the amount of plastic being produced," she explained.

While plastic bag levies have led to a dramatic reduction in the number of single-use bags in circulation environmental campaigners are now concerned about the impact of bags for life" which use more plastic. Their sale, in huge quantities, is feared to be making the plastic problem worse rather than better.

This is a significant addition to the collective of commitment that has already been made to this by UK supermarkets.

However, ensuring that this is a shared approach rather than a competitive tool is vital, so it will be interesting to see whether there is any collaboration on consolidating and sharing the supply chains used for this particularly - or at the least sharing best practice in this area to the benefit of the industry, as well as the customer."

1.52pm BST

Over in the US, household incomes rocketed last month, as stimulus checks were sent out as part of its pandemic relief package.

And rocketed really isn't an exaggeration. Personal incomes increased by 21.1% (!) in March.

The increase in personal income in March largely reflected an increase in government social benefits. Within government social benefits, other" social benefits increased.

The American Rescue Plan Act established an additional round of direct economic impact payments to households.

NEW: U.S. personal incomes soared in March by the most in monthly records back to 1946, powered by fiscal stimulus https://t.co/HvUcypPvs1

Household income surged by a record 21.1% in March, as stimulus checks hit bank accounts and propelled consumer spending https://t.co/u56IzZwu6a

US Bureau of Economic Analysis chart showing the effect of economic impact payments on personal income through March: #personalincome #spending #pandemicrelief pic.twitter.com/Rk7aoQJIAz

1.35pm BST

Yet more GDP data, this time showing that Canada's economy grew by 0.4% in Februry alone...

Canada GDP month-on-month at 0.4% https://t.co/3lZfCVUTCg pic.twitter.com/Okj9HaoNkI

#Breaking
Canada February GDP rises 0.4% m/m (est. up 0.5%)
-March GDP Flash Estimate up 0.9%
Source: Stats Canada

1.27pm BST

One property expert has suggested the UK could be on the brink of a housing super-boom, after Nationwide reported the fastest jump in prices since 2004 this morning.

The UK's biggest building society said high demand and the limited number of homes on the market could fuel a summer boom, with double-digit percentage growth in annual house prices a possibility by June.

The combination of high demand and low supply could create the conditions for a housing super-boom the likes of which we haven't seen since the early 2000s."

1.12pm BST

AstraZeneca's chief executive, Pascal Soriot, has mounted a robust defence of the drugmaker's Covid-19 vaccine efforts.

Soriot said the business should be proud of what it has done for the world and is doing its very best" to produce more, as the company faces legal action from the EU over delivery shortfalls, and shipments to poorer countries have also been delayed.

We don't regret anything, we haven't been perfect but we did the very best, we should be proud of what we did in the world,"

1.02pm BST

In other GDP news... Mexico grew by 0.4% last quarter, faster than forecast.

#TomaNota El INEGI publico hoy las cifras de la estimacion oportuna del PIB en el 1T2021.
En el periodo:

La economia mexicana avanzo 0.4% trimestral pero cayo (-)2.9% anual.

Revisa mas informacion en nuestro #SemaforoEconomico de crecimiento: https://t.co/XGZNk9H7PF pic.twitter.com/tVf2MLnykB

1.01pm BST

Here's another chart, showing how the eurozone's Big Four countries are lagging behind the US:

The 2nd wave of lockdowns in Europe has had a particularly severe impact on Germany dragging EZ economy with it into a double dip recession. https://t.co/2SYTAV3TfI pic.twitter.com/o81FfBrEnQ

12.34pm BST

The CEO of Barclays bank has predicted that the UK economy is on course for its biggest economic boom since the 1948s.

The country's coronavirus vaccination programme allows consumers to go out and spend, said Jes Staley this morning -- echoing recent upbeat forecast from economists.

Jes Staley predicted the strongest year for economic growth since the aftermath of the second world war, at 6.5% this year, as tremendous pent-up demand" built up during the pandemic is released.

So we see - just like you're starting to see in the US as well - quite a robust economic recovery in 2021," Staley said. We think that will carry through into 2022."

Barclays' CEO says the UK's on track for its strongest growth since WWII

Upbeat view from a bank that's still taking a "cautious" approach and putting aside more cash for potential defaults in Q1, rather than releasing bad debt provisions like rivals https://t.co/IpM2coPCgK

12.26pm BST

The New York Times is also struck by the contrast between Europe and America's economies so far this year...

Coming a day after the United States disclosed that its economy expanded 1.6 percent over the same period, the European downturn presented a contrast of fortunes on opposite sides of the Atlantic.

Propelled by dramatic public expenditures to stimulate growth, as well as swift increases in vaccination rates, the United States - the world's largest economy - expanded rapidly during the first months of 2021. At the same time, the 19 nations that share the euro currency were caught in the second part of a so-called double-dip recession, reflecting far less aggressive stimulus spending and a botched effort to secure vaccines.

But figures for gross domestic product represent a snapshot of the past, and recent weeks have produced encouraging signs that Europe is on the mend. The alarming spread of Covid-19 in major economies like Germany and France has begun to trend downward, factories have revived production, while growing numbers of people are on the move in cities.

The eurozone economy contracted by 0.6% over the first three months of the year, sliding back into recession. https://t.co/P1zQ4DfTpB pic.twitter.com/cvQe2gKtGk

12.21pm BST

Back in the markets, palladium has hit a new record high -- over $3,000 per ounce for the first time ever.

Palladium 3,000!!! pic.twitter.com/tJFOA5TwbH

#Palladium >$3,000/OZ#History $PALL #preciousmetals pic.twitter.com/rCYzjvzuVL

The theft of catalytic converters is often carried out by opportunist thieves who may be working their way around different neighbourhoods.

This isn't always the case, however, and there is evidence to suggest that criminal gangs are involved in these types of thefts."

11.42am BST

Although Europe has lagged behind this year, economist Bert Colijn of ING is confident it will start to recover in the current quarter.

Colihn predicts that the eurozone's underlying resilience" means it will see a pandemic rebound soon:

The first quarter has been another disappointment in the eurozone as lockdowns were extended pretty much throughout the first three months of the year. With a decline of 0.6%, the eurozone has gone through its second technical recession during the pandemic.

Despite the decline, underlying developments were quite encouraging in the first quarter. Underlying activity started to pick up from mid-January onwards. Small easings of restrictions had quite strong effects on consumption, meaning that consumers seem eager to spend when reopenings happen. Also, unemployment has been declining over the course of the second wave, confirmed today by the March release showing a drop from 8.2 to 8.1%.

The eurozone's going through a second technical recession with latest GDP and inflation numbers just out. But things should change very quicklyhttps://t.co/0mcJzBTgtM

The recession is a thing of the past. With progressive vaccinations and a seasonally slower spread of the coronavirus, infection figures should continue to fall in the coming weeks.

Amidst rising Covid-19 case numbers and associated lockdown measures in Q1, the eurozone economy has entered a technical recession with a second consecutive quarter of GDP contraction.

Looking ahead, the slower vaccine rollout and subsequent delays to reopening the economy could stifle growth within the currency union, though this is still expected to reach 4.0% in 2021."

11.33am BST

Inflation across the eurozone has jumped this month.

Annual euro area inflation is expected to be 1.6% in April, up from 1.3% in March, after a jump in prices.

Euro area #inflation up to 1.6% in April: energy +10.3%, services +0.9%, food +0.7%, other goods +0.5% - flash estimate https://t.co/U8lAerQEnI pic.twitter.com/4I8TZmYKuA

11.22am BST

Today's eurozone GDP report highlights the growing divergence between Europe (in recession after shrinking 0.6% in Q1) and America (recovering strongly with 1.6% growth).

Silvia Dall'Angelo, senior economist at the international business of investment manager Federated Hermes, predicts the US will probably power ahead for the next couple of quarters.

The evolution of the pandemic, the policy response and structural differences have explained the de-coupling.

Going forward, the US economy is likely to continue to outperform for the next two quarters at least, reflecting the ongoing impact from fiscal stimulus and further progress in the vaccine rollout leading to a safe reopening of the economy and return of confidence.

10.56am BST

Unemployment across the eurozone has dropped, but remains higher than before the pandemic.

Eurostat reports that euro area seasonally-adjusted unemployment rate fell to 8.1% in March, from 8.2% in February 2021, but up from 7.1% in March 2020.

Euro area #unemployment at 8.1% in March, EU at 7.3% https://t.co/Eaate4FkgD pic.twitter.com/CWaK443ujA

10.44am BST

Looking ahead, says CNBC, economists are confident that the eurozone economy will recover this year.

Countries in the region are due to start receiving EU-wide Covid support funds in the second half of the year, and the vaccination campaign has accelerated significantly since the start of 2021.

The European Union expects to have 70% of the adult population vaccinated this summer and tourism-reliant countries are hoping that a larger number of vaccinated people will allow them to have a more successful summer season this year.

Eurozone GDP continued to contract in Q1, falling 0.6% and signaling double-dip recession: https://t.co/UOBCNFyaKE pic.twitter.com/LFAkoFP16R

10.33am BST

The eurozone's fall back into recession also show the importance of vaccinating its population, so that economies can reopen and tourism can restart this summer.

Robert Alster, CIO at wealth manager Close Brothers Asset Management, says:

Put simply, the EU is dragging its feet when it comes to its economic recovery. However, speed aside, it is moving in the right direction - particularly as the vaccine roll out gathers pace.

The summer months are crucial for southern Europe's road to recovery, with countries such as Spain, Italy and Greece heavily reliant on tourism. Hospitality businesses in particular will be banking on some sort of rebound, if not we could see a late summer of discontent aimed at Brussels.

10.25am BST

Here's a table with more detail of today's eurozone GDP report:

10.14am BST

Newsflash: The eurozone has fallen into a double-dip recession, as the restrictions imposed to battle the third wave of Covid-19 and save lives hit growth.

Eurozone GDP shrank by 0.6% in the first three months of this year, new figures from Eurostat show.

#BREAKING Eurozone enters double-dip recession in first quarter: official pic.twitter.com/N2m6VVaG46

Among the Member States for which data are available for the first quarter 2021, Portugal (-3.3%) recorded the highest decrease compared to the previous quarter, followed by Latvia (-2.6%) and Germany (-1.7%), while Lithuania (+1.8%) and Sweden (+1.1%) recorded the highest increases.

The year on year growth rates were negative for all countries except for France (+1.5%) and Lithuania (+1.0%).

Euro area #GDP -0.6% in Q1 2021, -1.8% compared with Q1 2020: preliminary flash estimate from #Eurostat https://t.co/WrdMJzTebX pic.twitter.com/3vj8yAtepk

#Italy's GDP fell 0.4% in the first quarter of 2021.

The decline in output means the country fell into a double-dip recession amid virus lockdowns and the slow vaccination campaign. The nation is second only to the U.K. in pandemic deaths in Europehttps://t.co/Edh4j2Go1D pic.twitter.com/HsmFINlY2r

9.44am BST

Portugal's economy has also shrunk, with GDP sliding by 3.3% in the first quarter of 2021 during its lockdown.

Statistics body INE says this is due to the restrictions imposed, due to the worsening of the pandemic crisis at the beginning of the quarter".

Portugal GDP Growth Rate QoQ Prel at -3.3% https://t.co/o9PhlMR2av pic.twitter.com/E2L4VUj5uM

9.33am BST

The German economy saw a severe setback" in the first quarter, says Carsten Brzeski of ING, responding to the 1.7% drop in GDP.

Having been a growth engine in the final quarter, the economy has become a drag on the entire eurozone, he warns:

On the year, Germany's economy was down by 3%. While the country was a positive growth driver for the entire eurozone economy at the end of last year, it has now turned into a drag factor.

The vaccination programme is finally getting moving and with the prospect of at least 50% of the adult population having had a first jab before the summer, a more substantial reopening of the economy should not be too far away.

Germany's economy suffers a major setback | Snap | ING Think - The German economy saw a severe setback in the first quarter, shrinking by 1.7% QoQ. A growth engine in the final quarter, the economy has become a drag on... https://t.co/t18IS1h0jM

9.28am BST

Here's some early reaction to the fall in Germany's GDP last quarter, from the FT's Martin Arnold:

The third wave of the pandemic dealt a setback to the German economy which shrank 1.7% in the first quarter, compared to the previous quarter (and that's despite strong tailwinds from a rebound of global trade)

#German #economy took significant hit in first quarter as #GDP contracted 1.7% quarter-on-quarter & down adjusted 3.0% year-on-year as COVID restrictions particularly weighed on consumer spending. #Italian GDP declined by lesser 0.4% quarter-on-quarter & 1.4% year-on-year in Q1 https://t.co/XNYHz2tsMO

9.26am BST

Italy has contracted by 0.4% in the first quarter of the year, as the pandemic continued to hit its economy.

Statistics body ISTAT says industry grew, as did agriculture, forestry and fishing and in industry, but the services sector saw a fall in activity (due to the Covid-19 restrictions).

From the demand side, there is a positive contribution by the domestic component (gross of change in inventories) and a negative one by the net export component.

Italy GDP Growth Rate QoQ Adv at -0.4% https://t.co/4KYXd8ypia pic.twitter.com/gz1flCHCUf

The Italian economy plunged in the first half of last year due to government lockdowns to try to rein in the coronavirus.

It rebounded in the third quarter when restrictions were relaxed before shrinking again at the end of the year as the epidemic gathered strength again, forcing new curbs on businesses and freedom of movement.

9.12am BST

The coronavirus crisis pulled Germany's economy into a contraction in the first three months of this year, explains statistics body Destatis:

It says:

The gross domestic product (GDP) declined by 1.7% in the 1^st quarter of 2021 on the 4^th quarter of 2020 after adjustment for price, seasonal and calendar variations.

After the German economy had recovered slightly in the second half of 2020 (by +8.7% in the 3^rd quarter and +0.5% in the 4^th quarter, according to most recent calculations), the coronavirus crisis caused another decline in economic performance at the beginning of 2021. This affected household consumption in particular, while exports of goods supported the economy.

Gross domestic product in the 1st quarter of 2021 down 1.7% on the previous quarter. https://t.co/z38fuY9vnc #GDP pic.twitter.com/lWpOi5B9H5

9.09am BST

Germany's economy has shrunk sharply in the first quarter of the year, as the third wave of Covid-19 hit.

German GDP fell by 1.7% in the January-March quarter, slightly worse than the 1.5% contraction expected.

OUCH! German economy shrank 1.7% in Q1 QoQ vs expected 1.5% slump. pic.twitter.com/1rYKhzIrbO

8.55am BST

Shares in British cybersecurity company Darktrace have surged after it joined the London stock market today.

Shares in Darktrace jumped around 40% at the start of trading; they touched 359p, having floated at 250p, which valued the firm at 1.7bn.

Big congrats to @Darktrace team @PoppyGustafsson - great start on LSE. The company's IPO is a landmark event for the London Stock Exchange and the British technology sector, paving the way for flourishing tech companies to follow in their footsteps. pic.twitter.com/tWz9sfwshV

8.43am BST

In the City, the FTSE 100 index has risen 25 points in early trading to 6987, up 0.35%.

Pharmaceuticals firm AstraZeneca are the top riser, nearly 3%, after reporting better-than-expected results this morning. Total revenues jumped 15% to $7.32bn, including $275m in revenues from its Covid-19 vaccine.

8.42am BST

Here's Reuters' take on Spain's economic contraction last quarter:

As infections surged in the wake of the Christmas holidays, authorities tightened restrictions on movement and limited business opening hours, weighing on output and denting early optimism for a quick recovery from 2020's record 10.8% slump.

Output fell across all sectors in the first quarter, the INE data showed, with construction the worst performer and consumption and investment also slipping.

8.28am BST

The story so far...

First quarter 2021 #Eurozone #GDP data now coming out. #French #economy grew 0.4% quarter-on-quarter & #Austria expanded 0.2% q/q. However, #Spain suffered GDP contraction of 0.5% q/q

8.20am BST

Austria's economy has returned to growth.

GDP rose by 0.2% in the first three months of the year, following a 2.7% contraction in Q4 2020.

The positive development in industry and construction compensated for the continued declines in the consumption-related service sectors. The business activities in these sectors continued to be burdened by the restrictive measures taken to contain the COVID-19 pandemic.

On the demand side, consumer spending by private households continued to decline, while there were positive trends in investment.

Austria GDP Growth Rate QoQ Flash at 0.2% https://t.co/pAKTuooPJW pic.twitter.com/aVAOxUjrpk

8.14am BST

Spain's economy shrank by 0.5% in the first three months of 2021, as Covid-19 restrictions weighed on output.

That follows stagnation in the final three months of 2020:

Spain GDP Growth Rate QoQ Flash at -0.5% https://t.co/MUSK1wytp8 pic.twitter.com/iCSuudYbCY

Spanish Q1 Prelim GDP Report - INEbasehttps://t.co/gQAfNJTwgu pic.twitter.com/pMzhAv0Qg9

8.00am BST

Europe's recovery is reliant on Covid-19 vaccinations allowing economies to reopen.

And budget airline easyJet says it is seeing stronger demand for flights in the autumn, as British holidaymakers hold off booking holidays until they know where they can travel.

If you would compare it to normal times, we are seeing relatively stronger numbers coming into September, October and November.

7.45am BST

Economist Nadia Gharbi of Pictet Asset Management shows how France's economy is still 4.4% short of its pre-crisis level, while the US has nearly closed the gap:

GDP rebounded slightly in Q1 (+0.4% q-o-q).
GDP still 4.4% below its pre-crisis levelhttps://t.co/AxObYqqPs6 pic.twitter.com/KBnVH85UFB

7.39am BST

In the UK, house price have jumped at the fastest pace in 17 years.

Mortgage lender Nationwide reports that house prices jumped by 2.1% in April alone, with the extension of the stamp duty holiday driving demand. That's the biggest monthly increase since 2004.

Just as expectations of the end of the stamp duty holiday led to a slowdown in house price growth in March, so the extension of the stamp duty holiday in the Budget prompted a reacceleration in April.

Housing market activity is likely to remain fairly buoyant over the next six months as a result of the stamp duty extension and additional support for the labour market included in the Budget, especially given continued low borrowing costs and with many people still motivated to move as a result of changing housing preferences in the wake of the pandemic.

Further ahead, the outlook for the market is far more uncertain. If unemployment rises sharply towards the end of the year as most analysts expect, there is scope for activity to slow, perhaps sharply.

7.29am BST

More reaction....

#France's economy unexpectedly grew in Q1, with #GDP growth up 0.4%. pic.twitter.com/myVmcCIXhy

Some Europe q1 GDP first estimates out today. So far France with growth of 0.4%. Still -4.4% compared with pre-pandemic (q4 2019)

7.27am BST

President Macron's decision to delay tightening France's lockdown until March may also have contributed to the rise in GDP.

Bloomberg says:

The French economy returned to growth in the first quarter after the government delayed implementing strict Covid-19 lockdowns that have since clouded the outlook.

Output in the euro area's second-largest economy grew 0.4% in the three months through March, helped by President Emmanuel Macron decision to put off the tougher restrictions imposed in other European countries.

It's euro-area GDP Super Friday. France's data out first: Economy expanded 0.4% in 1Q (helped by Macron's decision to put off the tougher restrictions imposed in other European countries) https://t.co/TQ555zNzcw pic.twitter.com/QwEzYAxJ0j

7.01am BST

France's statistics body, INSEE, points out that France's economy is still 4.4% below its precrisis level.

It says:

Gross domestic product (GDP) rose again in Q1 2021: +0.4% after -1.4% in Q4 2020. However, the economic rebound was limited, as GDP is still 4.4% below its level of Q4 2019.

Final internal demand (excluding inventory changes) made a positive contribution to GDP growth this quarter (+0.9 points after -3.0 points in the previous quarter). Gross fixed capital formation (GFCF) intensified its dynamic (+2.2% after +1.3%) and households' consumption expenditure picked up slightly (+0.3%), after a strong decline in the previous quarter (-5.7%).

In Q1 2021, exports declined (-1.5%) more than imports (-0.1%). Overall, foreign trade made a negative contribution to GDP growth this quarter: -0.4 points, after +1.2 points in the previous quarter.

6.56am BST

Oliver Rakau of Oxford Economics says France's growth report has surprised to the upside'.

That could indicate that other EU countries may beat expectations today:

French Q1 GDP surprised to the upside following on the yesterday's upside surprise in Belgium. This suggests that we may see more upside surprised later today. And along with the strong March lending & April ESI data it looks like the eurozone economy had a really good week. pic.twitter.com/juDkkWdORK

6.41am BST

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

Today we discover how Europe's economy fared in the first quarter of 2021, in the face of the third wave of the Covid-19 pandemic.

France GDP Growth Rate QoQ Prel at 0.4% https://t.co/YZQGQp1rmQ pic.twitter.com/Jcf4I6p2Vi

Spain's economy is expected to contract by -0.5%, after stagnating in Q4, with Italy set for a similar -0.5% contraction, coming on top of a -1.9% contraction in Q4. Germany's economy is also expected to contract by -1.5%.

This set of numbers is expected to equate to a -0.8% contraction in Q1 for EU GDP, following on from a -0.7% contraction in Q4.

Unemployment levels are expected to remain steady at 8.3% for March, while the latest preliminary April CPI figures are set for another sharp gain, this time to 1.6%, from 1.3% in March.

This will inevitably fuel concerns about inflationary pressures in the euro area given that headline CPI has risen from -0.3% at the end of last year to current levels in less than four months.

Strap in for a very busy morning in the Eurozone economic calendar ... French Q1 GDP out in a tick, and then the numbers will come out steadily until 11:00 CET.

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