Markets bounce despite new eurozone recession warning

Markets across Europe recovered from early losses on Thursday despite a new warning from the EU Commission that the eurozone may fall into recession next year.

The latest forecasts, released this morning, predict that the eurozone economy will grow by just 0.5% in 2012, a sharp reduction from an estimate of 1.5% six months ago. Olli Rehn, the EU's vice president for economic and monetary affairs, said although the EC did not expect a recession, the "unusually high uncertainty" around key policy decisions and the probability of a longer period of stagnation meant it could not be ruled out. "Growth has stalled in Europe, and there is a risk of a new recession," he said. Even if the eurozone as a whole avoids recession next year, many of its...