Data in the coming week should confirm the euro-zone economy is running hot, after the IMF upgraded growth forecasts and Greece returned to the debt market, although inflation figures could throw cold water on ECB plans to start tightening policy.
Growth in the single currency area outstripped paltry expansion in the United States and Britain in the first quarter and the pace did not let up in the April-June period.
The euro zone may not be a growth champion in the second quarter, after the US rebounded to an annualised 2.6 per cent thanks to consumer spending and business equipment investment. But it should again fare better than Britain, whose economy failed to build momentum.
A forecast expansion of 0.6 per cent in the April-June period, equivalent to an annualised 2.4 per cent, would be the third consecutive quarter in which the euro zone has grown at or above a half percentage point, for the first time since 2007-08.
"The global economy has been a jumbo jet running on just one engine for the last five, six years, the US, but now it seems there's more from the euro zone as well, with encouraging signs from Asia too," said James Knightley, the chief international economist at ING.
Data at the weekend showed the euro zone's second-largest economy, France, grew by 0.5 per cent for a third successive quarter, while Spanish GDP returned to pre-crisis levels with 0.9 per cent expansion.
"Momentum is there. We're getting a broadening out of countries in terms of economic performance. It's not just the likes of Germany driving it all forward ... There does seem to be self-sustaining momentum," said Mr Knightley.
Euro-zone economic sentiment, as compiled by the European Commission, grew for a third straight month in July to a new 10-year high due to a pick-up of the dominant services sector. And confidence levels in all sectors, as well as for consumers, are far above historical averages.
The IMF has hiked outlooks for China and the euro zone, while trimming those for the US and Britain. The Fund said the euro zone's recovery was firming and becoming broad-based, with stronger domestic demand, although it warned of downside risks.
Political risks seen at the start of the year ahead of elections in France and the Netherlands have diminished, while Greece has returned to the bond market after a three-year exile.
Five years ago, the European Central Bank president Mario Draghi pledged to do "whatever it takes" to save the euro. His ultra-easy monetary policy is partly behind the robust economic recovery, showing more effect this year as growth in bank loans to the private sector hit a 10-year high in May.
Now the question is when to taper. Strong economic growth should steer the ECB towards reining in asset purchases, but policymakers are still waiting on inflation.
The flash estimate for July, due on Monday, is seen stable at 1.3 per cent, well short of the ECB's target of just below 2 per cent. Perhaps more significantly, the core figure, without volatile energy and unprocessed food prices, is seen falling.
"The economy is recovering and the labour market is doing quite well, but we think core inflation will be at 1 per cent and below for the rest of 2017," said Marco Wagner, an economist at Commerzbank. "Except Germany, if you look at France, Italy, Spain or Portugal there are still overcapacities, still relatively high unemployment."
Among the clearest signs of a rebound has been the euro's pick-up to around UA$1.17, from $1.05 at the start of the year. UniCredit on Thursday raised its forecast for the euro-dollar rate to $1.20 for the end of the year and an "equilibrium" rate of $1.25 for end-2018, from $1.14 and $1.18 respectively before.
"The political risk factor has been taken out," said Vasileios Gkionakis, the co-head of strategy research at UniCredit. "It would bring the rate in line with our estimate of fair value and in all likelihood the market will overshoot."
Of course, a stronger euro could dampen euro-zone growth and cap inflation, a further issue for ECB policymakers to consider.
Outside Europe, US monthly jobs data for July on Friday is likely to be the key figure for economists and the Federal Reserve, whose policy-setters next meet on September 19-20.
US job creation surged by more than expected in June and is seen lower but still strong in July, a sign of labour market strength that could keep the Fed on course for a third interest rate hike this year.
More significant may prove to be average wage growth, however. It is seen at 0.3 per cent, the highest rate since February, after months of hovering between 0.1 and 0.2 per cent.
* Reuters
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Frida%20
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek independent legal advice.
HOSTS
T20 WORLD CUP
2024: US and West Indies; 2026: India and Sri Lanka; 2028: Australia and New Zealand; 2030: England, Ireland and Scotland
ODI WORLD CUP
2027: South Africa, Zimbabwe and Namibia; 2031: India and
Bangladesh
CHAMPIONS TROPHY
2025: Pakistan; 2029: India
MATCH INFO
Alaves 1 (Perez 65' pen)
Real Madrid 2 (Ramos 52', Carvajal 69')
BRIEF SCORES
England 228-7, 50 overs
N Sciver 51; J Goswami 3-23
India 219, 48.4 overs
P Raut 86, H Kaur 51; A Shrubsole 6-46
England won by nine runs
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
if you go
The flights Fly Dubai, Air Arabia, Emirates, Etihad, and Royal Jordanian all offer direct, three-and-a-half-hour flights from the UAE to the Jordanian capital Amman. Alternatively, from June Fly Dubai will offer a new direct service from Dubai to Aqaba in the south of the country. See the airlines’ respective sites for varying prices or search on reliable price-comparison site Skyscanner.
The trip
Jamie Lafferty was a guest of the Jordan Tourist Board. For more information on adventure tourism in Jordan see Visit Jordan. A number of new and established tour companies offer the chance to go caving, rock-climbing, canyoning, and mountaineering in Jordan. Prices vary depending on how many activities you want to do and how many days you plan to stay in the country. Among the leaders are Terhaal, who offer a two-day canyoning trip from Dh845 per person. If you really want to push your limits, contact the Stronger Team. For a more trek-focused trip, KE Adventure offers an eight-day trip from Dh5,300 per person.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
COMPANY%20PROFILE
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Dubai Rugby Sevens
November 30-December 2, at The Sevens, Dubai
Gulf Under 19
Pool A – Abu Dhabi Harlequins, Jumeirah College Tigers, Dubai English Speaking School 1, Gems World Academy
Pool B – British School Al Khubairat, Bahrain Colts, Jumeirah College Lions, Dubai English Speaking School 2
Pool C - Dubai College A, Dubai Sharks, Jumeirah English Speaking School, Al Yasmina
Pool D – Dubai Exiles, Dubai Hurricanes, Al Ain Amblers, Deira International School
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
The%20specs
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