Eurozone growth accelerates

Economic recovery in the Eurozone has stepped up according to new GDP data published today, with the bloc outshining the U. S. and China for the second successive quarter.

Growth rose faster than expected to 2.2 per cent in the three months to September, following a rise of 2.1 per cent in the previous quarter, meaning the euro area is now just 0.5 per cent smaller than in the final quarter of 2019 before the pandemic hit.

The bloc’s progress could be derailed in the final three months of the year by surging inflation, which — according to preliminary data also published this morning — hit a 13-year high of 4.1 per cent in October, driven by supply chain problems and soaring energy prices.

The new inflation data add to pressures on the European Central Bank to begin loosening its pandemic support program. ECB president Christine Lagarde yesterday pushed back against expectations of a rise in interest rates next year to combat the threat, despite admitting that the bank’s latest meeting was dominated by “inflation, inflation, inflation”.