Euro zone growth beats projections but headwinds mount
SPY•SPY•SPY•SPY•The euro zone economy grew 0.4% in the third quarter, above the 0.2% expected, while year-on-year growth reached 1.3%. Inflation rose in most major economies, and a further ECB rate hike was seen as increasingly likely.
The 21 countries sharing the euro grew 0.4% in the third quarter, slowing from 0.6% in the previous quarter but exceeding the 0.2% expected in a poll of economists. The economy expanded 1.3% from a year earlier, compared with expectations for 1.1%. Germany grew 0.2%, Spain and the Netherlands 0.6% each, Italy was unchanged and France contracted 0.1%.
Inflation accelerated in most of the euro zone’s biggest countries, and bloc-wide annual inflation could reach 3.9% or above, compared with the ECB’s 2% target. The article said this would strengthen bets on another rate hike in December. An ECB survey showed rising inflation expectations and suggested price growth may not return to target until 2028; Italy’s central bank governor Fabio Panetta said further rate increases could be needed. Unemployment held at 6.5% in August.
