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Prospects for European Economies Not Good

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Over the past ten years, GDP growth per person in Germany, France and Italy averaged 1.5%, down from 2.5% during the 1980s. And although there has been a resurgence in the last year or so, longer term prospects look grim, according to the report.

The productivity trend throughout the EU has been slowing for 30 years, and actually fell by 1% in the last 10 years. This has happened in spite of high hopes for the integration of the European market.

This weakening productivity compares with 2.5% trend productivity growth in the US and 2% in the UK.

But things do not look good in the UK either. Unemployment claims have been up for 10 months in a row, and inflation is actually above expectations, and above GDP growth. That has not happened since 1992.

The UK fiscal deficit has also been above the forecast for the last 5 years.

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