"Euro-zone GDP growth in the third quarter was likely highly dependent on domestic demand. Consumer spending should have benefited from relatively decent fundamentals for Eurozone consumers".
- Howard Archer, Chief UK & European Economist at IHS Global Insight
The single European area economy grew at the same slow pace in the third quarter as the second while core inflation, in turn, dipped in October, reinforcing expectations that the European Central Bank will negotiate to extend its asset-buying program in December. Meanwhile, Euro-zone's preliminary gross domestic product growth increased a seasonally adjusted 0.3% in the third quarter. The following data was in line with forecasts and unchanged from Q2. Consumer prices, in turn, advanced 0.5% year-on-year in October, picking up from 0.4% in September and 0.2% in August as the drag on the index from energy diminished. In the meantime, energy prices were only 0.9% lower in October than 12 months earlier, compared to 3.0% down in September. However, excluding the most volatile prices for unprocessed food and energy, inflation was just 0.7% on a yearly basis, down from 0.8% in the previous five months. The figure is the one the ECB uses as core inflation.
Eventually, the ECB is going to meet in December and will have to decide whether it extends its bond-buying beyond an initial target date in March.
© Dukascopy Bank SA