Euro-Area Growth Forecast Lifted Again as U.K. Outlook Dims

Raising its 2017 forecast for the 19-country bloc to 2.2 percent from 1.7 percent in May, the EU‘s executive arm cited „resilient private consumption,“ and it predicted a 2.1 percent expansion in 2018. It cut its 2017 prediction for the U.K. and sees growth cooling to just 1.1 percent in 2019, which would be the worst performance since the recession of 2009.

On inflation, while the euro-area rate is projected to remain below the European Central Bank‘s goal for the foreseeable future, the U.K.‘s will exceed the Bank of England‘s target through 2019. Part of that is the impact of a weaker pound, though signs of price pressure prompted the BOE to raise interest rates this month for the first time in 10 years.