Press release
— Economic Outlook in Western Europe in 2026 —
Economic developments across Western Europe have been uneven in 2026. In the euro area, GDP grew by 0.4% in the second quarter compared with the previous quarter and by 1.0% compared with the second quarter of 2025. The annual inflation rate rose to 2.9% in July, from 2.8% in June. Alongside economic growth, price developments and monetary policy remain important factors.
Germany
The German economy grew by 0.3% in the second quarter of 2026 compared with the previous quarter, following growth of 0.4% in the first quarter. According to the Federal Statistical Office, growth was supported in particular by exports. Compared with the second quarter of 2025, real GDP was 1.0% higher.
In August, around 2.996 million people were unemployed on a seasonally adjusted basis. The seasonally adjusted unemployment rate remained at 6.4%.
Spain
Spain recorded the strongest growth among the major economies covered here. GDP grew by 0.7% in the second quarter compared with the previous quarter and by 2.7% compared with the same quarter a year earlier. Domestic demand made a positive contribution to growth, while external demand held it back.
Italy
Italy’s GDP grew by 0.2% in the second quarter compared with the previous quarter and by 1.0% compared with the same quarter a year earlier. Economic sentiment also improved slightly in August, with both consumer and business confidence rising compared with July.
France
The French economy recorded no growth in the second quarter, with GDP unchanged from the previous quarter. In the first quarter, GDP had fallen by 0.2%. At the same time, the preliminary annual inflation rate rose to 2.4% in August, from 2.1% in July.
United Kingdom
The UK economy grew by 0.4% in the second quarter compared with the previous quarter, following growth of 0.6% in the first quarter. Growth was supported in particular by the services sector. The annual consumer price inflation rate was 2.9% in July.
Overall, the latest figures show moderate but uneven growth across Western Europe. Spain currently has the highest growth rate among the countries covered, while the French economy recorded no growth in the second quarter. Germany, Italy and the UK recorded moderate increases.
At the same time, inflation remains an important factor for future economic developments. The European Central Bank kept its key interest rates unchanged in July and continues to emphasise a data-dependent approach. How growth, inflation and monetary policy develop over the coming months will therefore be important for the economic outlook in Western Europe for the rest of 2026.