The unexpected contraction in the euro area economy during the third quarter as well as inflation slowing to a more than two-year low in November reflects the impact of the aggressive monetary policy tightening stance adopted by the European Central Bank so far but the stage is still not set for a rate cut as inflation is forecast to stay "higher for longer".
Gross domestic product registered a quarterly contraction of 0.1 percent in the third quarter, in contrast to the 0.2 percent expansion in the second quarter, Eurostat said in its preliminary flash estimate, released Tuesday.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.