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Euro zone inflation sinks to 2.4%, below expectations
  + stars: | 2023-11-30 | by ( Jenni Reid | ) www.cnbc.com   time to read: +2 min
(Photo by Ying Tang/NurPhoto via Getty Images)Annual inflation in the euro zone cooled to 2.4% in November from 2.9% in October, flash figures showed Thursday. Inflation in the euro zone's largest economies, Germany and France, has dropped to 2.3% and 3.8%, respectively. ECB officials have repeatedly stressed that it is too early to declare victory over price rises in the 20-member euro zone bloc, as they monitor potential pressures from wage increases and energy markets. Separate data released by statistics agency Eurostat on Thursday showed that unemployment in the euro area remained at a record low of 6.5% in October, despite a contraction in the euro zone economy in the third quarter. "For the ECB, signs of an imminent victory on inflation are mounting," Bert Colijn, senior euro zone economist at ING, said in a note, adding that some of the impact from existing monetary tightening was yet to be felt.
Persons: Ying Tang, , Mathieu Savary, Bert Colijn Organizations: Aachen, Getty, Reuters, European Central Bank, Energy, ECB, BCA Research, Eurostat, ING Locations: Aachen, Germany, France, European
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via Email'No common capital market a big problem for the euro zone,' strategist saysMathieu Savary, chief European strategist at BCA Research, dissects the speech of ECB's Christine Lagarde during the annual European Banking Congress.
Persons: Mathieu Savary, ECB's Christine Lagarde Organizations: BCA Research, European Banking Congress Locations: European
But the interest they earned on their assets increased from 16 billion euros to 66 billion euros in the same period. As a result, euro zone firms’ net interest was negative 19 billion euros in the second quarter of 2023. These financial gains may have helped euro zone growth. A further 700 billion euros matures in 2026. Homeowners with mortgages, which account for around 27% of euro zone households, are yet to feel the brunt of higher rates.
Persons: That’s, Mathieu Savary, Gross, Peter Thal Larsen, Oliver Taslic, Thomas Shum Organizations: Reuters, European Central Bank, Reuters Graphics Reuters, ECB, BCA Research, Oxford Economics, International Monetary Fund, Oxford, IMF, Thomson Locations: Oxford, Spain, Italy, France, Germany, United States, China
(Photo by Kirill KUDRYAVTSEV / AFP) (Photo by KIRILL KUDRYAVTSEV/AFP via Getty Images)Inflation across the euro zone dropped to a two-year low of 2.9% in October, according to preliminary data released Tuesday, down from 4.3% the previous month and below a consensus estimate of 3.1% from a Reuters poll of economists. The agency also revealed Tuesday that the euro zone economy contracted by 0.1% in the third quarter, according to flash estimates, below consensus estimates for GDP to be unchanged from the previous quarter. The ECB expects the euro zone economy to grow by just 0.7% this year, by 1% in 2024 and 1.5% in 2025. The euro zone has been grappling with high inflation for the past 18 months, with the consumer price index peaking at 10.6% in October 2022. The ECB needs to see wage inflation slowing and this could take a further six months," he added.
Persons: Kirill KUDRYAVTSEV, KIRILL KUDRYAVTSEV, Mathieu Savary, Mark Wall Organizations: Getty, European Union, Eurostat, ECB, European Central Bank, Council, BCA Research, Deutsche Bank Research Locations: Frankfurt, Germany, AFP, Europe's, Latvia, Belgium, Spain, Ireland, Austria, Israel, European
U.K. gross domestic product grew by 0.2% in August, the Office for National Statistics estimated Thursday, partially recovering from a downwardly revised 0.6% contraction in July. "It does not change the outlook for the Bank of England and confirms that the Bank Rate does not have much upside from here, but will remain at current levels for an extended period." The Bank of England last month ended a run of 14 consecutive interest rate hikes after data showed inflation was running below expectations. "The UK has grown faster than France and Germany since the pandemic and today's data shows the economy is more resilient than expected," U.K. Finance Minister Jeremy Hunt said Thursday. U.K. headline inflation dipped to an annual 6.7% in August, below expectations but still well above the Bank's 2% target.
Persons: Mathieu Savary, Jeremy Hunt, Thiru Organizations: Citibank, HSBC, National Statistics, BCA Research, Bank of England, of England, Bank, Finance, Institute of Chartered Accountants, Wales, Bank of England's Locations: Wharf, London, United Kingdom, U.K, European, France, Germany, England
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