Breadcrumb Trail Links PMN Business Author of the article: Reuters Philip Blenkinsop Article content BRUSSELS — The euro zone economy grew faster than expected in the second quarter, pulling out of a recession caused by the COVID-19 pandemic as curbs to stop the virus were eased, while inflation shot past the European Central Bank’s 2% target in July. The European Union’s statistics office Eurostat said on Friday that its initial estimate of gross domestic product in the 19 countries that use the euro currency was growth of 2.0% quarter-on-quarter and 13.7% year-on-year. Economists polled by Reuters had expected a 1.5% quarterly and a 13.2% annual increase. Advertisement Story continues below This advertisement has not loaded yet, but your article continues below. Article content Among the outperformers were the euro zone’s third and fourth largest economies, Italy and Spain, with quarterly growth respectively of 2.7% and 2.8%. Portugal’s tourism-heavy economy expanded by 4.9%. The euro zone has suffered two technical recessions – defined as two quarters of contraction – since the start of 2020, with coronavirus curbs hitting most recently in the period spanning the end of 2020 and the start of 2021. The zone’s GDP was largely dragged down in the first three months of this year by weakness in Germany where a lockdown from November had curbed private consumption. Europe’s largest economy returned to growth in the second quarter, but at 1.5% quarter-on-quarter, it was less strong a rebound than expected. Advertisement Story continues below This advertisement has not loaded yet, but your article continues below. Article content The French economy, the euro zone’s second largest economy, grew by 0.9%, just ahead of forecasts, with a third lockdown gradually being eased from May. However, many euro zone countries are facing new waves of infections with the more transmissible Delta variant. Figures on Thursday showed the U.S. economy grew at a slower than expected 6.5% annualized rate in the second quarter, pulling GDP above its pre-pandemic peak, as massive government aid and vaccinations fueled spending on goods and services. Eurostat also said euro zone inflation accelerated to 2.2% in July, the highest rate since October 2018, from 1.9% in June and above the mean expectation of economists of 2.0%. Energy prices were again the driving factor, rising 14.1% year-on-year. Advertisement Story continues below This advertisement has not loaded yet, but your article continues below. Article content Without the volatile energy and unprocessed food components, or what the European Central Bank calls core inflation, prices rose 0.9% year-on-year, the same as in June. Economists had expected a dip to 0.7%. The figures are unlikely to worry ECB policymakers, who have already warned of a temporary spike in inflation and made clear they would not adjust policy as the one-off factors behind the rise, such as higher oil prices, are likely to fade next year. Indeed, the ECB even promised a longer period of easy policy when it unveiled a new strategy earlier this month, as inflation beyond this spike is likely to languish below its target for years to come. Eurostat also said that euro zone unemployment fell in June to 7.7% of the workforce, or 12.517 million people, from an upwardly revised 8.0% in May, or 12.940 million people. Economists had expected a jobless rate of 7.9%. (Reporting by Philip Blenkinsop; additional reporting by Balasz Koranyi in Frankfurt; Editing by Francesco Guarascio and Catherine Evans) Share this article in your social network Advertisement Story continues below This advertisement has not loaded yet, but your article continues below. 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Article content SHANGHAI — Following an ill-timed launch, a Chinese fund that promised to offer global investors a “golden” opportunity to buy Chinese education stocks has dropped more than 40% this month, on track to become the country’s worst-performing mutual fund in July. Beijing last week barred tutoring for profit in core school subjects to ease financial pressure on families, a move that spooked investors in China’s $120 billion private tutoring industry. Reflecting those fears, the Bosera CSI Global China Education ETF, the country’s only exchange-traded fund dedicated to the education industry, ended Friday at 0.537 yuan per fund unit, almost half the value on its June 17 debut. Article content The slump in the education ETF, which invests in 50 major Chinese education companies listed in New York, Hong Kong and mainland China, also underscores the risk of outbound investment products in China. The fund’s portfolio companies, including New Oriental & Technology Group and China Education Group Holdings , crashed in the wake of the the government’s crackdown. The ETF currently manages 176 million yuan ($27.25 million)worth of assets, according to Reuters calculation. The heavy loss contrasts sharply with the fund’s optimism during launch. The ETF, which operates under the outbound QDII scheme, allows investors to buy Chinese education companies listed globally, accessing a “golden race track” that benefits from policy support and growing demand, the fund manager said at the time. The ETF’s manager, Bosera Asset Management Co, declined to comment. In an exchange statement, Bosera said the fund’s unit value may suffer heavy volatility in the future and cautioned investors against risks. ($1 = 6.4579 Chinese yuan renminbi) (Reporting by Samuel Shen and Andrew Galbraith; Editing by Sonali Paul)
Article content LONDON — British digital bank Monzo has disclosed it is facing a potential civil and criminal money laundering investigation by regulators, in its annual report released on Friday. “We’re cooperating with the FCA’s investigation, which is at an early stage,” Monzo said in its report. The bank reported bottom line losses for the year of 130 million pounds ($181.68 million), up from 114 million pounds the previous year. ($1 = 0.7156 pounds) (Reporting by Iain Withers, editing by Lawrence White)
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Reported with Miles Bryan and Jillian Weinberger as part of a collaboration for Vox’s “Today, Explained” podcast.
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