Eurozone economy shrinks by a record 2.5%

EUROZONE economies collectively shrank by a record 2.5% in the first three months of the year as the recession battered the continent.

The quarter-on-quarter slump for the 16 countries using the euro – the worst since the statistics centre Eurostat began collecting data for the series in 1995 – took economists by surprise. And it was followed by a slight upturn in the pound’s value against the European single currency.

The decline in eurozone GDP was driven in part by a record 3.8% contraction in Germany’s economy, as demand for its high value goods, such as cars and machinery, collapsed.