Summary Euro zone inflation lowest since July 2021 in OctGDP shrinks slightly in Q3FRANKFURT, Oct 31 (Reuters) - Inflation in the euro zone hit a two-year low a month after its economy began contracting, data showed on Tuesday, illustrating the dual impact of a steady diet of European Central Bank's interest rate hikes.
But the brisk decline from the double-digit figures of just a year ago is coming at a cost: the euro zone economy dipped by 0.1% in the three months to September, according to a separate Eurostat release, and is flirting with a recession.
"The data leaves the ECB firmly on hold," Dirk Schumacher, an economist at Natixis, said.
"It's now down to weaker demand grinding down inflation and that's a slow process," Natixis' Schumacher said.
"Still, continued economic and geopolitical uncertainty alongside the impact of higher rates on the economy will weigh on economic activity in the coming quarters."
Persons:
Dirk Schumacher, It's, Natixis, Schumacher, Bert Colijn, Francesco Canepa, John Stonestreet
Organizations:
ECB, ING, Thomson
Locations:
FRANKFURT, European