Is Brexit making the eurozone’s economic problems worse?

Brexit Explained: Germany’s recession means the zone’s three largest economies are all stalling

In the second half of last year the German economy shrank, so the new official forecast for growth this year of only 0.5 per cent comes not as a surprise but a shock. Italy is already officially in recession, while France is growing very slowly. So the UK economy is growing faster than the three biggest eurozone economies at the moment.

There is an obvious point here to be made about Brexit. The UK has confounded expectations that the uncertainties generated by the attempts to leave the EU would push the economy into recession. This week’s employment figures were strong, and there are forecasts that next month unemployment will drop even further, to 3.8 per cent. But core Europe is in trouble. Why?

The first thing to say is that Germany’s problems have very little to do with Brexit and a lot to do with a wider slowdown in the world economy. There has been a slight fall in export orders to the UK for plant and machinery, but that is not the main problem. It has been hit by two other things.