Eurozone economy shrinks at record pace
The eurozone's economy shrank at a record pace of 3.8% in the first quarter of 2020 – faster than expected – as the Covid-19 crisis started to take its toll.
The decline in the three months to March showed the beginnings of the impact of economic lockdowns across the single currency zone and was steeper than the 3.5% average economists' forecast.
The quarter-on-quarter drop, published by Eurostat, was the biggest in the survey's history dating back to 1995. Output in the wider EU also fell at a record rate and faster than expected, dropping 3.3% compared with a consensus forecast of 3.1%.
The sharp decline was led by France, whose economy dropped into recession with a 5.8% contraction in the first quarter. Spain's economy also contracted faster than expected, shrinking by 5.2% in the first quarter.
The dire figures coincided with the European Central Bank's monetary policy meeting. The ECB's head Christine Lagarde is due to unveil the central bank's decision at lunchtime on Thursday.
David Madden, market analyst at CMC Markets, said: "The ECB’s meeting will be in focus today, and dealers will looking to see if the central bank is wholeheartedly committed to assisting the eurozone in this time of huge uncertainty."
Unemployment in the eurozone rose to 7.4% from 7.3% in February as EU unemployment edged up to 6.6% from 6.5% but worse is to come. German's jobless rate leapt to 5.8% in April from 5% in March as the number of people out of work rose by 373,000 – faster than expected.