Growth starting to slow

June’s survey data confirmed that GDP growth in Q2 is very unlikely to have matched Q1’s 0.6% quarterly expansion, with both the EC Survey and the PMI appearing consistent with around a 0.3% rise. Industrial production and retail sales data have supported this picture, with modest monthly gains early in the quarter failing to match the sharper increase at the start of Q1. We expect the slowdown to continue in the second half of the year as a steady rise in inflation weighs on households’ real incomes growth. And the UK’s Brexit vote may cause some additional damage to euro-zone sentiment in the months ahead too.