German economic growth raced ahead of its counterpart France towards the end of last year, in another sign the euro area is increasingly becoming a "two-speed" region in terms of economic growth.
German gross domestic product (GDP) surged 0.7 per cent in the fourth quarter of 2014, having expanded 0.1 per cent previously, its federal statistics office said today. The figure was way above economists' expectations of 0.3 per cent growth for the last quarter, and had been buoyed by consumer demand.
Meanwhile, the French economy grew just 0.1 per cent in the final three months of last year, showing that firms remain unwilling to invest. Again, this was mainly driven by consumer spending, as industry was flat while manufacturing actually shrank.
Figures out later are likely to show the Eurozone economy expanded just 0.2 per cent in the last quarter of 2014. The euro area is battling falling prices and stubbornly high unemployment rates, while the Greek debt crisis has reignited fears the euro will break up.
Last month the European Central Bank (ECB) announced a quantitative easing programme, which it hopes will ward off a period of prolonged deflation and kick-start economic growth.