France and Germany in Economic Growth Surge

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Byline: Iain Laing

TWO of Europe's largest economies - Germany and France - have returned to strong growth in the first quarter of 2011, overshadowing the lacklustre performance of the UK.

Germany, Europe's powerhouse economy, grew by 1.5% after benefiting from the global recovery as emerging nations imported more of its manufactured goods such as machinery and cars.

Its growth was more than three times the 0.4% growth in the final of quarter of 2010 when, like the UK, it was hampered by snowbound conditions.

Meanwhile, the French economy exceeded forecasts to grow by 1% in the first quarter thanks to higher consumer spending and corporate investment. In the previous quarter it had grown at just 0.3%.

French prime minister Francois Fillon said he was confident France would achieve its target of 2% growth this year.

The UK's economy, on the other hand, grew by just 0.5% in the first quarter of 2011 following a decline of 0.5% in the previous period, suggesting stagnation over the six months.

The UK is suffering from weak consumer confidence as wages fail to keep up with surging inflation and the Government makes swingeing cut-backs. However, the strong growth of some of Europe's biggest economies could be good news for the UK by stimulating demand for exports.

The German growth was stronger than the 1% expected by analysts and means the economy has now made up the output it lost in the recession. …