Eurozone GDP stays steady on 0.3 per cent in third quarter
The Eurozone economy grew by 0.3 per cent in the period after the UK's Brexit vote, as some of Europe's most vulnerable economies accelerated slightly.
Greece and Portugal both grew by 0.8 per cent in the third quarter, with the former doubling its growth rate from the second quarter. Portugal's growth rate accelerated even faster, by 0.5 percentage points.
The figures were in line with expectations and bring the annualised growth rate in the third quarter slightly higher to 1.7 per cent.
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The broader European Union – which includes the UK – outperformed the Eurozone by a thin margin, posting quarterly gross domestic product (GDP) growth of 0.4 per cent, bringing the annual EU rate to 1.9 per cent, according to the EU's statistical office.
The Eurozone has struggled for growth
Eurozone growth has dipped in 2016, hitting an 18-month low of 1.6 per cent annual growth in the second quarter after posting steady growth of two per cent for most of 2015.
While the continued growth will serve as encouragement for Eurozone policymakers, it shows that the bloc is still significantly underperforming globally. US third-quarter GDP growth was recorded at 0.8 per cent, as the economy seems to be turning around from a sustained period of falling GDP.
While accurate polling predictions seem to have prepared the market for the result of Sunday's Italian referendum, a number of potentially risky events could stall Europe's growth. Elections in the Netherlands, France and Germany all promise to give exposure – and potentially power – to politicians espousing anti-trade policies.
"The upside for Eurozone growth continues to be constrained by a number of fundamental factors, including structural impediments in a number of countries (notably Italy and France) and ongoing significant banking sector problems," said Howard Archer, chief UK and Europe economist at IHS Global Insight.
The European Central Bank's (ECB) Governing Council meets on Thursday to decide monetary policy. While an interest rate rise is not expected, investors will listen closely for any sign of an extension of the quantitative easing programme of bond-buying beyond March 2017.
ECB president Mario Draghi has repeatedly stressed that he believes the bank's accommodative monetary policy has been an integral driver of recovery since the Eurozone crisis.