Eurozone grows 0.4% as France shrinks – Italy's inflation jumps to 5.4%
According to Eurostat's flash estimate, the euro area economy grew 0.4% in the third quarter. At the same time, inflation in France and Italy accelerated sharply on the back of energy prices.
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Euro area gross domestic product rose 0.4% in the third quarter of 2026 compared with the previous quarter, after 0.6% in the second quarter, according to Eurostat's flash estimate of Oct. 30. Year on year, growth was 1.3%, and 1.5% in the EU as a whole. Germany grew 0.2%, Spain 0.6%, Italy stagnated (0.0%) and France contracted by 0.1%. Eurostat stresses that the data are preliminary and will be revised.
At the same time, prices are rising faster. According to preliminary data from statistics office Istat, Italian inflation accelerated to 5.4% in October from 4.2% in September, with energy 31.4% more expensive than a year earlier. In France, inflation rose to 3.4% according to Insee (3.8% on the EU-harmonised measure), with energy up 24.1%. Spain's rate held at 4.9%, while in Germany it fell to 2.8% thanks to the fuel tax cut.
Paolo Grignani of Oxford Economics described, according to Euronews, "a mixed picture for the Eurozone with stagflationary tendencies" – weak growth combined with high inflation. Pantheon Macroeconomics raised its forecast for euro area inflation in October to 4%, and Oxford Economics expects two more interest rate hikes by the European Central Bank. The ECB's deposit rate currently stands at 2.5%, its inflation target at 2%.