Aug 23 - Germany and Britain see their economies expand by 0.7% in the second quarter, fuelling ''a wave of improving optimism'' about a euro area recovery. Kirsty Basset reports.
More signs the recovery in the euro zone is picking up. Germany's economy expanded 0.7 percent between April and June, the strongest pace in more than a year, driven by domestic demand. It's fuelling hopes the country's economy could outperform in 2013 - and have a positive impact on the rest of the euro zone. Carsten Brzeski is from ING. (SOUNDBITE)(ENGLISH) SENIOR ECONOMIST CARSTEN BRZESKI SAYING: "We've seen that the euro zone left the recession in the second quarter. If the German economy now continues, probably not at the current pace, but at a strong growth number in the second half of this year, we could see a nice interaction between the German growth improving confidence in the other euro zone countries and then also the euro zone really returning to growth numbers in the second half of the year." It's good news for German Chancellor Angela Merkel, who faces an election in less than a month. (SOUNDBITE)(ENGLISH) SENIOR ECONOMIST CARSTEN BRZESKI SAYING: "Right now the euro zone seems to be riding a kind of wave of improving optimism. It's too soon to say the crisis is over but we do see that things are improving and the cycle at least is improving in the euro zone." There was more good news across the channel as well, with British GDP data beating expectations. The British economy expanded 0.7 percent in the second quarter, sending the pound higher and the FTSE100 rose slightly. Exports saw their biggest rise since late 2011, jumping 3.6 percent, while consumer spending rose 0.4 percent. The Bank of England has pledged to keep interest rates low while unemployment is above 7 percent. But if Britain's economic recovery speeds up, that theshold may be reached sooner rather than later.