European Economic Expansion has cooled.

The economic slowdown driven by the US has hit European shores as export demand and consumer spending has been reduced alongside rising food and energy bills.

The knock on effect from slower growth in the US is accentuated by the strength of the euro, making Europe less competitive.

A year ago the European economy grew by 2.3 percent, although this trend has stalled at hit a low of 0.4 percent over the last quarter.

With the overriding fear of recession in the US the European Central Bank meanwhile has avoided cutting interest rates even though inflation is currently at a 14-year high due to inherent risk to economic growth,

According to Nick Kounis of Fortis Bank “we’re looking at a measured slowdown, a different story than what we’re seeing in the U.S. and the U.K.”

As the International Monetary Fund have highlighted in their report dated 29th January that the emerging markets will alleviate the pressure on the advanced economies.

Within the Union there are marked differences as the largest contributor Germany slowed by 0.4% to the last quarter, whilst Spain and France showed unexpected growth.

According to Ken Wattret the fourth quarter “was no disaster, but worse is to come as the service industries in Europe are slowing for the first time in four years.

With inflation up to 3.2 percent and consumer confidence down to a two year low the signs are there that a measured slowndown as predicted may actually harder than expected should current trends continue.

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