European stock markets are still sliding in a poor week that began with China’s intensifying regulatory crackdown on education and technology companies.

• UK’s FTSE 100 index down 28 points, or 0.4%, at 7,050
• Germany’s Dax down 68 points, or 0.4%, at 15,571
• France’s CAC down 6 points, or 0.1%, at 6,627
• Italy’s FTSE MiB down 38 points, or 0.1%, at 25,476

Wall Street has opened lower, with the Dow Jones falling 0.2% or 62 points, the Nasdaq tumbling 1% or 154 points and the S&P 500 sliding 26 points, a 0.6% drop. But the Dow has just ventured into positive territory.

The 1% increase in consumer spending in June as captured by yesterday’s GDP data, which showed that spending grew at a robust 11.8% annualised rate last quarter. This accounted for much of the economy’s 6.5% growth, which lifted the level of GDP back to pre-crisis levels – above its peak in the fourth quarter of 2019.

As a reminder, the US economy has returned to its pre-pandemic level despite growing at a weaker rate than expected in the second quarter, figures from the US Commerce Department showed yesterday.

Gross domestic product (GDP) increased at a 6.5% annualised rate in the three months to the end of June, as government financial support helped power a sharp rise in consumer spending.

We will get the first estimate of UK GDP in the second quarter on 12 August.

Here is our full story on the 2% rebound in the eurozone economy in the April to June quarter as Italy and Spain powered ahead, despite disappointing growth from Germany, normally Europe’s economic powerhouse.

Italy and Spain have helped drive the eurozone out of recession after a stronger than expected 2% expansion in the second quarter of 2021, official data has shown, writes the Guardian’s economics editor Larry Elliott.

The 19-nation single currency area beat forecasts of a 1.5% increase in gross domestic product despite a disappointing performance from the bloc’s powerhouse economy, Germany.

The FTSE 100 index in London is still trading 0.9% lower at 7,013, a loss of 65 points. European stock markets are a sea of red – Germany’s Dax is also down by almost 0.9% while Italy’s FTSE MiB has lost 0.5% and France’s CAC has slipped 0.2%.

Shares in the British engineering firm Babcock plunged 12% after it warned of cash flow problems and posted a wider full-year operating loss of £1.6bn after a huge writedown.

And our story on British Airways owner, International Airlines Group, which has announced plans to gradually return more planes to the skies after reporting a €2bn (£1.7bn) loss for the first half of 2021.

International Airlines Group (IAG) said it hoped to raise passenger capacity for the pivotal summer period to about 45% of its 2019 pre-pandemic capacity, up from only 20% for the first six months of the year, with hopes that its lucrative transatlantic UK-US routes could reopen fully.

However, the airline group said its plans “remain uncertain and subject to ongoing review”.

Here is our full story on NatWest Group (formerly Royal Bank of Scotland). The bank has returned to profit and announced plans for a fresh round of dividends and share buybacks that will result in a payout of at least £190m for the Treasury.

The majority taxpayer-owned lender said it planned to pay investors dividends worth £347m at 3p a share after swinging to a £2.5bn profit in the first half of the year as the British economy recovers from Covid-19.

Bert Colijn, senior eurozone economist at ING, has looked at the pick-up in eurozone inflation to 2.2% in July.

Inflation jumped on food and energy prices, while core inflation ticked down despite German VAT effects kicking in. Not much evidence of overheating in this release. Unemployment continues to come down on the reopening of economies, providing more upside for medium-term inflation.

The inflation rate for July ticked back up above the European Central Bank’s target, but remember, President Christine Lagarde made it very clear that the central bank won’t act on temporary inflation. This release didn’t provide much evidence of more structural inflation as core inflation fell back from 0.9% to 0.7%. While it ticked up strongly in Germany on the back of VAT effects, other countries have seen a drop that more than offset this effect.

Non-energy industrial goods inflation, which had been rising over recent months, fell back from 1.2% to 0.7%, which indicates that the price pressures related to transport costs and input shortages are not yet translating into soaring consumer goods prices. Services inflation only increased from 0.7% to 0.9%, which shows a modest increase but certainly does not give the impression of broad price hikes on the reopening of economies.

Still, this doesn’t mean that the inflation concern is over. We expect both services and goods inflation to trend higher in the coming months and food and energy prices have outperformed our expectations so far. This adds to upside inflation risk for the months ahead.

Among the European countries for which data are available for the second quarter, Portugal (+4.9%) recorded the highest increase compared to the previous quarter, followed by Austria (+4.3%) and Latvia (+3.7%), while Lithuania (+0.4%) and Czechia (+0.6%) recorded the lowest increase. The year on year growth rates were positive for all countries.

The French economy enjoyed a modest bounce, growing by 0.9% in the April to June quarter, slightly better than expected, following no change in the first three months of the year (revised from a 0.1% drop).

This means of the major European economies, only Germany – normally Europe’s powerhouse – disappointed with 1.5% growth, while the eurozone as a whole powered ahead with 2% growth. Italy and Spain put in strong performances of 2.7% and 2.8% respectively.

Germany has been held back by the bottlenecks in the global supply chain, in particular shortages of microchips and semiconductors, as we explained earlier.

Carsten Brzeski, global head of macro at ING, says:

The German economy rebounded in the second quarter, albeit at a slower pace than expected. Despite the downside risks to growth, we expect the economy to return to pre-pandemic levels before the end of the year and today’s data shows that growth parties on the back of reopenings can easily be disturbed by other factors.

Economic activity since the start of the pandemic has been closely linked to restrictions and social distancing. Therefore, the rebound of the German economy does not come as a surprise. However, this rebound is weaker than suggested by buoyant confidence indicators.

The reason for this gap between soft and hard data is clearly the long list of supply chain frictions, starting with the problems of the ‘Evergiven’ in the Suez Canal, continued with delays in production and delivery of microchips and semiconductors and could now be problems with the waterways due to heavy rains. The only good thing about these supply chain frictions is that eventually, they will end.

As order books are richly filled and inventories are still low, activity in the German industry will accelerate. At the same time, however, sentiment in the service sector is still far off from record highs and rather mute, while consumer spending could be undermined by higher inflation in the second half of the year.

Meanwhile, the Italian economy (the third largest in the eurozone) has done better than expected, expanding 2.7% in the second quarter, according to Istat. This comes after 0.2% growth in the first quarter. Analysts had expected 1.3% growth.

Spain’s economy grew by 2.8% in the second quarter compared with the first, as it bounced back from a 0.4% decline in the first three months of the year, helped by looser Covid restrictions on businesses.

We’ve also looked at the human cost of medicine price hikes, after the London-listed pharma firm Advanz and its former private equity owners were fined more than £100m over the price of its thyroid tablets. We’ve spoken to two people about the difficulty of obtaining affordable medication.

A couple of stories that ran late yesterday:

UK-listed companies announced a combined £7.2bn in dividends and share buybacks on Thursday, as the economic rebound and receding Covid fears allowed firms to resume bumper payouts to investors.

Big oil and miners dominated the dividend bonanza, with mining firm Anglo-American revealing the largest payout, worth a total of $4.1bn, after reporting its strongest half-year profit in the company’s 104-year history. It followed similar moves by Shell, drinks company Diageo and Lloyds Banking Group, which helped round out a bumper day for shareholders.

Over in the US, Amazon’s sales topped $100bn for the third quarter in a row as its profits for the three months surged to $7.8bn.

The Seattle-based tech and online retail giant reported sales of $113bn for the three months between April and June – over $1.4bn a day. The figure was up from $88.9bn in the second quarter of 2020 but slightly lower than Wall Street had expected, and triggered a 5% slide in its share price in after-hours trading.

British Airways’ owner IAG has reported a €2bn loss for the last six months, with passenger numbers down 80% from pre-Covid levels, reports our transport correspondent Gwyn Topham.

IAG said it was planning to raise passenger capacity for summer to around 45% of 2019 capacity, with hopes that its lucrative transatlantic UK-US routes could reopen fully.

However, the airline group said its plans “remain uncertain and subject to ongoing review”.

Continuing government restrictions on travel hampered its results, which barely improved in the second quarter from the first, despite the easing of most Covid lockdown rules. IAG said that for BA, its biggest carrier

The restricted nature of the ‘green’ list severely limited the recovery in capacity expected on the lifting of lockdown restrictions.

BA’s sister airlines, Iberia and Vueling, were the best performers in the group with relatively few restrictions on their routes from Spain and Latin America.

The UK’s house price boom is fairly extraordinary by any metric, but here is another one: customers on online property portal Rightmove spent an astonishing 10.4bn minutes browsing for a new home during the first half of 2021 - or 19,770 years.

Rightmove will again pay out an interim dividend, after revenues and operating profits both rose as lockdowns in early 2021 made people itchy for a new space, reports my colleague Jasper Jolly.

It said it expected “increased demand for properties” to continue in the second half of the year. Revenues and operating profits both rose in the first half of 2021 compared to 2019, while they were significantly higher than 2020, when the UK market was shut for months.

The company made revenues of £150m, up 4% against 2019, and operating profits rose by 6% against 2019 to reach £115m. That gave the company a fat operating profit margin of 77% (12 percentage points higher than 2020). The time-on-site metric showed how the company has benefited from the pandemic. It averaged 1.7bn minutes per month, compared to 1.1bn in both 2019 and 2020.

Revenues per estate agent advertising properties on the platform have also risen by 11%, pointing to the movement of househunters online during the pandemic.

Peter Brooks-Johnson, Rightmove’s chief executive, said:

The first half of 2021 brought further lockdowns, instilling in many a desire or motivation to move home, and the nation relied on us to help them to find their new life, with a record 10.4bn minutes spent searching and researching on Rightmove.