Germany shines as eurozone grows 0.8%

The economies of the 17 countries in the single currency block grew 0.8% in the first three months of 2011, up from 0.3% in Q4, figures out today reveal.

Germany and France saw their economies motor forward during the period as the gulf between the euro power-houses and their crisis-stricken neighbours looks set to deepen.

Powering the eurozone's growth in the quarter was Germany, which saw its economy grow at a larger-than-expected 1.5%, with France and Austria seeing GDP rise 1% and Spain recording growth of 0.3%.

Greece recorded a much-better-than expected growth figure of 0.8%, despite analysts speculating it will default on its debt.

Following release of the figures, the euro rose 0.4% against the dollar to $1.430 and 0.5% against the pound to £0.87910.

All major European indices are also rallying, with London's FTSE and France's Cac 40 climbing 0.9% and Germany's Dax advancing 0.6%.

The manufacturing and export-fuelled growth of the German and French economies comes as the economies of Ireland and Portugal lie in a perilous position. Portugal, which is about to receive a €70bn bailout package, saw its GDP contract 0.7% whilst Ireland is yet to report.

The UK economy grew 0.5% in the first quarter of the year, according to the Office for National Statistics.