Bloomberg.com:Europe's Economy Grew Fastest in Six Years in Second Quarter

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Europe's Economy Grew Fastest in Six Years in Second Quarter

Aug. 14 (Bloomberg) -- The economy of the euro nations grew the most in six years in the second quarter, making it likely that expansion this year will beat the European Central Bank's forecast and lead to further increases in interest rates. The $10 trillion economy expanded 0.9 percent from the first quarter, when it grew 0.6 percent, Eurostat, the European Union's statistics office in Luxembourg, said today. Growth will probably reach about 0.7 percent in the next two quarters before slowing to 0.5 percent at the start of 2007, the European Commission said. The second quarter is the first time since early 2001 that Europe's economy outpaced the U.S. Accelerating growth prompted the ECB to increase interest rates four times since early December to curb inflation. While the economy is poised to expand at the fastest since 2000, a combination of rising borrowing costs, higher oil prices and a stronger euro risks slowing growth later this year and into 2007.