Eurozone Inflation Slows while Recession Looms as ECB Rate Hikes Take Effect
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Euro zone inflation slowed to 2.9% in October, the lowest since July 2021, reflecting the impact of ECB interest rate hikes.
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Euro zone GDP shrank 0.1% in Q3, signaling the start of a shallow recession.
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Inflation is falling due to weaker demand, but the decline is gradual as it takes time for rate hikes to affect the economy.
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The recession may deepen due to economic and geopolitical uncertainty and the impact of higher rates.
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ECB is expected to pause rate hikes for now and monitor their impact before further tightening.