The eurozone entered a technical recession at the beginning of the year, as the 20-country bloc saw its economy shrink by 0.1 per cent for a second consecutive quarter, according to revised figures from the EU's statistic agency.
Eurostat's numbers, which had originally pointed to growth, showed contraction following the news that Europe's economic powerhouse, Germany, had slipped into recession.
Previously, Eurostat had estimated flat economic growth for the last quarter of last year and 0.1 per cent growth for the first quarter of 2023 – both quarters have now been revised to a 0.1 per cent contraction, meaning the eurozone entered a technical recession in January.
Eurostat's downgraded numbers is a blow to the recent perception that Europe's economies were faring reasonably well in the face of higher inflation, rising interest rates and the effects of the war in Ukraine.
The European Central Bank has raised interest rates by 3.75 per cent in just under a year, in its quest to quell rising inflation.
Falling forecasts
The European Commission forecast last month that the eurozone economy would grow by 1.1 per cent this year.
However, the latest figures from Eurostat have given economists pause for thought.
“Since the spring, all the data has been bad”, said Charlotte de Montpellier, an economist at ING Bank, who is now predicting that growth in the eurozone will be limited to 0.5 per cent this year.
“The European economy is in a phase of stagnation and has had difficulty getting through the winter because of the energy shock.”
Others expect the contraction of the eurozone's GDP will carry on through to the second quarter of this year, as higher interest rates hold back growth.
“GDP is likely to contract again in Q2 (the second quarter) as the effects of monetary policy tightening continue to feed through,” Capital Economics said in a note.
“Domestic demand has been hit hard by the combination of inflation and rising interest rates.”
At 6.1 per cent, the inflation rate in the eurozone remains far above the ECB's 2 per cent target, which prompted the Bank's president, Christine Lagarde, to hint that at least one rate increase should be expected.
The ECB's three key rates currently sit between 3.25 per cent and 4 per cent.
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Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
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MATCH INFO
Manchester City 0
Wolves 2 (Traore 80', 90 4')
T10 Cricket League
Sharjah Cricket Stadium
December 14- 17
6pm, Opening ceremony, followed by:
Bengal Tigers v Kerala Kings
Maratha Arabians v Pakhtoons
Tickets available online at q-tickets.com/t10
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Founded: 2013
Based: Egypt, Cairo
Sector: IT
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FORSPOKEN
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Starfield
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
COMPANY PROFILE
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Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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Bio Box
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