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Eurozone growth slows as inflation soars on energy costs

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Eurozone growth slows as inflation soars on energy costsEurozone economic growth fell to 0.2 per cent in the third quarter, as inflation hit another record high on the back of soaring energy prices, the EU's statistics agency said on Monday.

Consumer prices jumped by a fresh record of 10.7 per cent in October, up from 9.9 per cent the month before, stoked by an eye-watering 41.9 per cent 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 per cent growth.

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

Overall Eurozone growth increased by 2.1 per cent 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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