Self-generated eurozone highs not sustainable into next year

Growth will continue above trend across Europe through this year but is unlikely to be sustained in 2007. This is the view held by Andy Brunner, chief investment strategist at Forsyth Partners, who believes higher interest rates, a stronger euro, fiscal tightening including the 3% increase in German VAT and an attempt by Italy to cut its budget deficit, and a weaker US economy, will have an impact on growth. Even so, he is still forecasting growth of around 2% next year. This compares to the 2.5% growth currently being seen in 2006. Brunner says: "The European Central Bank's (ECB) deci...