The contrasting economic fortunes of the core of Europe and those at the edge of, or outside, the euro area persist. The consensus view has been that euroland economic growth will begin to accelerate this year and that there will be a slowdown (or even recession in the case of the UK) in the periphery.
This view looks like being confounded. Unemployment in euroland's biggest economies has stopped falling. Consumer confidence will slip unless those out of work start to get fewer again. If not, real wage gains will get saved, not spent. Then the widely expected recovery in core Europe during the second half of this year will founder. In the UK, by contrast, there are signs of growing consumer confidence, boosted by low mortgage rates and a buoyant labour market in services.
Europe's industrial sector is struggling. Order books are thin and capacity utilization is declining. So Europe's...
