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Eurozone Growth Slows As Inflation Soars On Energy Costs

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Eurozone economic growth fell to 0.2 percent in the third quarter, as inflation hit another record high on the back of soaring energy prices, the EU’s statistics agency said Monday.

Consumer prices jumped by a fresh record of 10.7 percent in October, up from 9.9 percent the month before, stoked by an eye-watering 41.9 percent rise in energy costs, Eurostat said.

The European Central Bank warned last week that a recession is looming, as it announced another jumbo interest rate hike to try to curb inflation driven up by the fallout from Russia’s war on Ukraine.

Moscow’s decision to drastically curb gas supplies to Europe has triggered an energy crisis on the continent, fuelling fears of power shortages and sky-high heating bills this winter.

The third quarter figure was marginally better than expected after economic powerhouse Germany bettered forecasts with 0.3 percent growth.

Among other key economies, France and Spain were at 0.2 percent and Italy on Monday announced growth of 0.5 percent.

Overall Eurozone growth increased by 2.1 percent compared to the same quarter last year, Eurostat said.

But despite the mildly better-than-expected news, analysts warned that a recession appeared to be on its way regardless.

“It is a matter of how deep the recession will be and not if there will be one,” Oxford Economics said in an analyst note.

“Therefore, while Q3 was more resilient than expected a recession over the winter in eurozone is imminent.”

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AFP

Agence France-Presse (AFP) is a French international news agency headquartered in Paris, France. Founded in 1835 as Havas, it is the world's oldest news agency.







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