Growth slowed in the eurozone in the second quarter of the year, but the lower-than-expected 0.3 per cent increase in gross domestic product (GDP) announced yesterday failed to dent economists' confidence in a brisk pickup in the coming months.

Economists had expected a 0.4 per cent increase in the total output of goods and services between April and June, but Eurostat, the EU statistics agency, said a slowdown in investment and consumption held back growth.

In addition, the agency revised down the increase in first-quarter growth to 0.4 per cent from 0.5 per cent.

Eurostat said investment grew just 0.1 per cent after a 2.5 per cent surge in the first quarter, while private consumption growth slowed to 0.1 per cent from 0.7 per cent.

Although the second-quarter figures were soft, he said over the first half of the year as a whole investment was quite strong and private consumption was relatively robust.

Overall, the fear of a collapse in confidence and output that prompted the European Central Bank to cut interest rates in April did not materialise, Mr Robert Lind of ABN AMRO said. As a result, the bank believes the ECB could start to reverse the half-point cut sooner rather than later.