Eurozone growth slows in third quarter

GDP rose by 0.2% on the previous quarter, down from 0.8% growth in the second quarter of the year.

Compared with the same quarter a year earlier, eurozone GDP increased 2.1%, down from 4.3% in the second quarter.

Pantheon Macroeconomics said: "The advance Q3 EZ GDP report shows that economic growth slowed from Q2, albeit much less than implied by the business surveys, on the back of stronger-than-expected outcomes in Germany and Italy and despite an outright fall in output in Austria and Belgium.

"The slowdown may have been even stronger than the headline suggests; there is a risk that the increase in Q3 will be revised lower, or even away fully, come the final estimate, given the likely reversal of cumulative 8% increase in Irish GDP in H1, and that Irish data are only added to the EZ figure then.

"Today's release does not contain details but we suspect that domestic demand was a boost to GDP growth while net trade was a drag on growth, given the message from the monthly nominal trade data and detail from national GDP breakdowns."

Separate figures released by Eurostat earlier showed that eurozone inflation hit a fresh record high of 10.7% in October, up from 9.9% a month earlier. Energy costs surged to 41.9% from 40.7%.

Andrew Kenningham, chief Europe economist at Capital Economics, said: "The increase in eurozone GDP in Q3 does not alter our view that the eurozone is on the cusp of a recession. But with inflation having jumped to well over 10%, the ECB will prioritise price stability and press on with rate hikes regardless."