Eurozone grows twice as fast as UK after GDP rises by 0.6% - as it happened

Euro area's recovery continues as GDP accelerates and factory output remains strong

• Latest: Eurozone grew by 0.6% in the last quarter
• Fastest annual growth since 2011
• Analysts: Europe looks surprisingly strong
• UK only grew by 0.3%, slower than France and Spain

Earlier:

• Eurozone factories keep growing
• UK factories boosted by exports
• Chinese factory growth hits four-month high
• British Gas hikes prices

3.42pm BST

Time for a recap on today's eurozone growth figures, from my colleague Katie Allen:

The eurozone economy has grown twice as fast as the UK in recent months, according to official figures that underscore the divergence between Britain and its neighbouring currency bloc after the Brexit vote.

GDP in the 19 countries that use the euro expanded 0.6% in the second quarter of 2017, building on growth of 0.5% in the first quarter, according the EU statistics body Eurostat (pdf).

Related: Eurozone economy grows twice as fast as UK's, figures show

3.23pm BST

Newsflash: America's manufacturing sector has slowed a little, and the nation's builders have been hit by falling spending too.

The ISM survey of the US factory sector dipped to 56.3 for July, down from 57.8 in June. That still shows growth, but at a slower rate.

U.S. factory gauge continues to signal solid expansion in July https://t.co/Cm8GpmLP8R pic.twitter.com/bMNfX4lBLR

2.59pm BST

Today's growth figures could signal that 2017 will be a vintage year for the eurozone, says IHS Markit's Raj Badiani.

He says that the European Central Bank's stimulus programme, which runs until at least the end of December, should support the economy.

Eurozone political uncertainties have been diluted by Macron's convincing win in the French presidential election and the defeat of the populist Freedom party in the Dutch elections, although they have not disappeared. Further uncertainty comes from the German election in September (although Merkel's Christian Democratic Union party is currently riding high in opinion polls), and a 2017 election is very possible in Italy following Matteo Renzi's December defeat in a referendum on constitutional reform. Additionally, although a third general election has been avoided in Spain, the minority government seems certain to find life difficult.

We also suspect the Brexit vote could further damage Eurozone activity in 2017 and 2018, now that the United Kingdom has triggered Article 50 (on 29 March), and its exit negotiations with the EU are under way.

2.36pm BST

Boom! The US stock market rally has driven the Dow Jones industrial average to a new record high.

As the chimes of the opening trading bell fade away, the Dow jumped by 94 points to 21,985 points.

2.24pm BST

Today's eurozone GDP figures have helped to keep shares buoyant in Europe today.

The main indices are all up today, with Britain's FTSE 100, Germany's DAX and the French CAC all up around 0.8%.

Stock Market could hit all-time high (again) 22,000 today. Was 18,000 only 6 months ago on Election Day. Mainstream media seldom mentions!

1.44pm BST

Although Britain is lagging behind the eurozone this year, it has still done better overall in the 10 years since the financial crisis.

Ben Chu of the Independent has the details:

...though important to note that, since 2008, UK GDP has grown almost twice as fast. Eurozone's stronger growth now likely partly cyclical pic.twitter.com/3nFlyHkjon

12.59pm BST

Robert Ward of the Economist Intelligence Unit says Europe's brisk growth is overshadowing Britain right now....

#Eurozone GDP growth brisk at 0.6% in Q2. Overshadows UK's 0.3% in same quarter. Spain outperforms. EZ recovery putting down deeper roots.

12.44pm BST

Thanks to today's robust data, the eurozone has now posted 17 quarters of growth in a row.

This expansion dates back to early 2013, during the debt crisis which gripped the continent for years.

EUREKA! Eurozone #GDP Growth +2.1% YoY in Q2, fastest pace since Q1 2011. Eurozone economy has grown for 17 consecutive quarters! pic.twitter.com/51Y4Xay9He

12.21pm BST

Europe's employment commissioner, Marianne Thyssen, tweets:

More good news: euro area GDP up with 2.1% compared to a year ago. Details ai #Eurostat https://t.co/NHrqT9Mx2i

We seem to be the only ones slightly disappointed by Eurozone GDP numbers. Strong growth but we thought it could even go a notch higher.

11.45am BST

We don't yet know how Europe's biggest economy, Germany, performed in the last quarter.

Economists expect solid growth, following Germany's 0.6% expansion in the first three months of the year. It's even possible that a strong performance from Germany could push up the eurozone growth rate to 0.7%.

German Q2 GDP has not yet been published, and the euro-zone aggregate has been produced using an estimate for Germany.

Given that the monthly data in Germany point to a very sharp acceleration in growth there, to as much as 1%, the euro-zone aggregate may yet be revised up. And the timelier surveys point to continued strong growth at the start of Q3.

11.42am BST

On an annual basis, the eurozone is now growing at the fastest pace since 2011.

That underlines how its economy has strengthened in the last year.

Eurozone GDP rose 0.6% q/q in Q2 after increasing 0.5% in Q1. The 2.1% y/y growth recorded in Q2 is the fastest in over 6 years pic.twitter.com/W9fYv1kaCP

11.12am BST

Bert Colijn, senior economist at ING, says the eurozone is in a "very healthy state" right now, after growing by over 1% since the start of the year.

Colijn expects further growth in 2017, following a "surprisingly strong first half to 2017".

No breakdowns for Eurozone GDP have been released so far, but domestic demand continues to be an important driver of growth. Especially the recovery in investments has been strong over recent quarters and has likely continued to boost GDP growth in the second quarter.

The same holds good for consumption, albeit at a somewhat slower pace. On the back of an accelerating jobs recovery and the highest consumer confidence since 2001, consumption is likely to have contributed significantly to growth as well. The recent appreciation of the euro is therefore unlikely to slow the current expansion significantly for the moment, given the domestic strength of the economy.

10.48am BST

Eurozone policymakers will be cheered by today's growth figures, says Mehreen Khan of the FT:

The health of the eurozone economy has confounded critics this year after a series of electoral setbacks for eurosceptic parties in the Netherlands, Austria, and France has boosted business and consumer confidence.

The economy has now expanded for 17 consecutive quarters and unemployment - long a scourge of the bloc's weakest economies- - is now at a nine-year low 0f 9.1%.

The eurozone economy picked up pace to grow 0.6 per cent in the second quarter https://t.co/axFmvVVQtE pic.twitter.com/otbmrhC3D1

10.27am BST

This chart shows how the eurozone has outpaced Britain in the last six months, after lagging behind in 2016.

Eurozone growth picks up to 0.6%q/q in Q2, for its 3rd consecutive solid quarter of growth, at the same time as the UK economy has slowed. pic.twitter.com/TyBKA0ZLxj

10.14am BST

It's official! The eurozone grew twice as fast as the UK in the second quarter of 2017, as its recovery gathers pace.

Eurozone GDP rose by 0.6% in the three months to June, new figures from Eurostat show. That's a pretty decent growth rate, as the region puts its debt crisis behind it.

10.04am BST

10.00am BST

The pound has hit a 10-month high against the US dollar, at $1.3235.

The pick-up in UK factory growth is boosting sterling.

9.55am BST

Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking, has welcomed the recovery in UK factory growth last month::

"Firms are facing uncertainty around the UK's future trading relationship with the EU but figures suggest exports are rising with a year-on-year increase of 15 per cent. This is partly a result of the weaker pound but also because more manufacturers are looking at new international markets beyond Europe.

"The news that BMW is planning to build the new electronic Mini at its plant in Oxfordshire is a timely vote of confidence in our industry's word-class expertise.

"UK manufacturers appear to be riding high going into the second half of the year with the sector in the UK and Europe continuing to be buoyed by a recovering global economy, alongside efforts to bring new products to the market.

Above trend responses across the key components of the survey would signal that the drag on overall economic growth from the sector in the second quarter of this year is likely to be temporary.

9.43am BST

Boom! UK manufacturing has bounced back from its slowdown in June, thanks to a surge in new exports, according to data firm Markit.

Markit's UK factory PMI jumped to 55.1 in July, up from the three-month low of 54.2 in June.

The headline PMI signalled a growth acceleration for the first time in three months during July, as new order intakes were boosted by a near survey-record increase in new export business. Although the exchange rate remains a key driver of export growth, manufacturers also benefitted from stronger economic growth in key markets in the euro area, North America and Asia-Pacific regions.

"Continued expansion is also still filtering through to the labour market, with the latest round of manufacturing job creation among the best seen over the past three years.

UK manufacturing growth up in July according to PMIs. 2nd best export orders fig in PMI's history. But big recent split with official stats. pic.twitter.com/GLi4YTgEm0

9.13am BST

Newsflash: Growth across the eurozone's factory sector slowed last month, but remains strong.

Markit's overall healthcheck on manufacturers across the euro area came in at 56.6, down from the 74-month high of 57.4 hit in June.

The PMI came in slightly below the earlier flash estimate, slipping to a four-month low, but this is still an encouragingly buoyant reading. The survey indicates that manufacturing output was growing at an annual rate of approximately 4% at the start of the third quarter, sustaining the best growth spell that the region has seen for six years.

"Germany clearly remains a major driver of the upturn, with only neighbouring Austria and the Netherlands enjoying faster rates of expansion. But this is a broad-based revival nonetheless, with even Greece enjoying its first back-to-back monthly improvement in manufacturing conditions for three years.

8.59am BST

Germany's factory sector seems to have cooled a little in July.

The German manufacturing PMI fell to 58.1 in July, down from 59.6 in June.

"The German manufacturing sector finally gave up some momentum in July, with the PMI easing to a five-month low of 58.1. This was still indicative of marked overall growth, however, with rates of expansion for output, new orders and jobs remaining historically sharp.

Supply chains in particular were kept under intense pressure at the start of the second half of 2017.

8.52am BST

The French recovery is alive and well!

Firms took on staff at the fastest rate in 17 years, and optimism over future prospects hit a record high.

8.49am BST

Italy's factories had a decent July, with new orders accelerating but output growth slowing a little.

They kept hiring workers too, according to Markit's PMI, but with the slowest increase in nine months.

Italy Manufacturing PMI (Jul) comes in at 55.1, prev: 55.2

8.35am BST

Spain's factory sector cooled a little last month, but is still growing:

Spain Manufacturing PMI (Jul) falls back to 54, from 54.7

8.35am BST

Factories in the Netherlands helped drive the eurozone recovery in July.

The Dutch manufacturing PMI has climbed to 58.9 in July, up from June's 58.6 and its highest reading since April 2011.

8.27am BST

Over in the City, shares in Rolls-Royce have surged over 5% after reporting better-than-expected earnings.

Underlying profits at the engineering firm jumped to 287m for the last six months, up from 104m a year ago.

8.18am BST

Millions of British Gas customers have woken up to the bad news that their energy bills are going up.

It's a big rise too! Centrica is hiking its electricity prices by 12.5% but left gas prices unchanged. This means the average dual fuel bill will rise by 7.3% to 1,120.

Related: British Gas hikes electricity prices by 12.5%

"Greedy" is one of the words I can read out.....

British Gas is putting up electricity prices by 12.5% in September. @skysarahjane asked the chief exec of British Gas owner Centrica why pic.twitter.com/7JnHnhbkfG

8.04am BST

China got manufacturing PMI day off to a solid start, by posting its best figures in four months.

China July Caixin Manufacturing PMI comes in at 51.1 (f'cast 50.4) vs 50.4 in June

Operating conditions in the manufacturing sector improved further in July, suggesting the economy's growth momentum will be sustained. That said, it's unlikely that financial regulatory tightening will be relaxed."

7.52am BST

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

Is Europe's recovery on firm foundations? We find out today, when the first estimate of eurozone GDP for the second quarter of 2017 is released.

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