The eurozone has emerged from recession in the third quarter, boosted by strong growth in Germany, leaving Britain languishing in its longest downturn in history.

The eurozone, comprising the 16 countries that use the euro, reported that gross domestic product (GDP) — a key measure of economic health — grew by 0.4 per cent in the three months to September. The 27-nation European Union, home to half a billion people, also reported growth of 0.2 per cent in the third quarter.

Germany, the zone’s biggest economy, confirmed its recovery, after exiting recession in the second quarter, when it said that GDP increased by 0.7 per cent in the third quarter. France also underlined its recovery, with 0.3 per cent growth.

However, the rate of growth for Europe’s two largest economies was not as high as expected. Economists had forecast that Germany would grow by about 0.8 per cent in the third quarter, and France by 0.6 per cent.

Britain remains the only leading economy still in recession after America joined Germany, France, Japan and China in exiting the downturn.

Earlier this week the Bank of England revised upwards its forecasts for growth from 1.9 per cent to 2.1 per cent in 2010, and from 3 per cent to 4 per cent in 2011, saying that the weak pound and its £200 billion money-printing scheme were likely to restore confidence.

The rate of unemployment in the UK has also slowed, as 30,000 more people lost their jobs in the three months to September, taking the total to 2.46 million and raising hopes that Britain’s jobless will fall short of the 3 million total analysts had feared.

Italy also emerged from recession today, with quarterly growth of 0.6 per cent following five quarters of contraction along with the Netherlands. However, Spain’s economy continued to contract, shrinking 0.3 per cent in the third quarter.

Howard Archer, chief UK and European economist at IHS Global Insight, capped potential growth for Europe in 2010 at 1 per cent, following the likely contraction of 3.9 per cent in 2009 overall, and warned that the recovery was still fragile.

He said: “This loss of momentum is expected to be the consequence of the withdrawal of some stimulus measures, including car scrappage schemes and employment support measures.”

“In addition, inventory developments could start to become less positive towards the middle of the year while the strong euro, high and still rising unemployment and persistent tight credit conditions amid still significant financial sector problems are also seen as weighing down on eurozone growth prospects.”

The US emerged from recession last month, following third quarter growth of 3.5 per cent. There had been fears that the world’s biggest economy could fall back into negative growth when Government stimulus funds run out.

However, Dominique Strauss-Kahn, managing director of the International Monetary Fund, said today: “I don’t believe the double-dip scenario is a probable one. There is some risk but I don’t believe it will happen.”

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