It might be tempting from a UK perspective to crow about the latest economic growth indicators.

British growth, at 0.2% for the second quarter (announced a few weeks ago) may have been paltry but it compares favourably with other leading European economies.

Spain registered growth at a snail’s pace of just 0.1% over the three month period. Germany’s economy contracted by 0.5%, while France and Italy chalked up a decline of 0.3%.

But any hubris is misplaced. Margins for error are small and there could be subsequent revisions of the figures. And few economists would predict that the UK is strongly placed to avoid negative growth at some stage over the next year.

Implications

Most alarming for British policymakers is the effect a eurozone slowdown will have on UK companies. Only yesterday, the Governor of the Bank of England, at his quarterly Inflation Report media conference, was citing export led growth as a positive factor for the economy next year.

Whatever happened to consumer demand in the wake of the housing market slowdown, he seemed to suggest, exporters could take up the strain.

But export driven expansion will be hard to achieve if Britain’s biggest trading partner is in recession. Half of the UK’s overseas sales of goods and services go to the eurozone. So a slowdown there will have significant implications for order books and jobs.

Consultancy Capital Economics has already run a slide rule across the trade numbers. It believes that total goods and services exports in the UK could be cut by 5% as a result of the European downturn. This might reduce UK GDP growth by as much as 1.2%.

All this assumes that exporters wont get a boost from the weaker pound.

Stark conclusion

Even so there is a stark conclusion to be drawn here – that a stagnant British economy could be pushed into recession by a continued slide in the major economies across Europe.

British exporters are aware of these harsh headwinds from across the Channel.

The outdoor clothing manufacturer Barbour, for example, told the BBC they were having to work hard to hold sales levels in Germany and knew things would get harder.

They were concerned about the German economic downturn and knew they were in for a tough winter.

All in all the British economy is in for a rough enough ride as it is, without being dragged down further by the eurozone’s problems.

News reported by The BBC