What's going on?

Data out on Monday showed that the eurozone grew by less than expected last quarter, as the region�s biggest economy gets teenier by the day.

What does this mean?

France and Spain�s economies grew more than expected last quarter, but so dire was the situation in Germany � Europe�s biggest � that it didn�t count for much. The home of schnitzel schtruggled with schortages, and ultimately saw its manufacturing-dependent economy shrink 0.7% last quarter versus the one before � more than twice the drop economists were expecting. That dragged growth in the eurozone down to a paltry 0.3% compared to the quarter before. Not a great end to the year, but the year itself wasn�t so bad: the eurozone�s economy was 5.2% bigger in 2021 than 2020 � the region�s fastest growth since 1971.

Why should I care?

Zooming in: Lifestyles of the thrifty and faceless.
The problem isn�t just shortages: data out on Monday showed that the prices Germans and Spaniards paid for goods and services rose by 5.1% and 6.1% respectively in January versus the same time last year. And since that�s yet another sign that inflation in Europe isn�t going anywhere fast, it arguably vindicates the International Monetary Fund�s decision last week to slash its annual growth forecast for the bloc.

The bigger picture: Britain�s a step ahead.
Europe�s lackluster growth might be why � sky-high inflation or not � the European Central Bank (ECB) has so far refused to raise interest rates and risk hampering spending even more. And economists don�t think that�ll change anytime soon, predicting that the earliest the ECB might take action is in September next year, once it�s fully wound down its bond-buying program. That would put it two years behind the Bank of England, which is expected to raise rates for the second time when it meets later this week.