Performance varied considerably across the region. Germany recorded quarterly growth of 0.2%, offering some relief after a prolonged period of industrial weakness. Spain and the Netherlands each grew by 0.6%, while Italy’s economy remained unchanged. France contracted by 0.1% amid political uncertainty and concerns over public finances.
The headline figure nevertheless requires some caution. Ireland recorded growth of 5.5%, largely reflecting the volatile activities of multinational corporations. According to an Associated Press analysis, euro-area growth would have been closer to 0.2% without Ireland’s unusually large contribution. Eurostat has also described the current figures as preliminary and subject to revision.
The United Kingdom Maintains Moderate Momentum
The United Kingdom has not yet published its complete GDP estimate for the third quarter; the first official figures are scheduled for 12 November. The latest available data show that the economy grew by 0.5% in the second quarter, following growth of 0.6% in the first. GDP increased by a further 0.7% during the three months to August compared with the previous three-month period.
The composition of British growth remains uneven. Services expanded by 0.9% in the three months to August, while construction fell by 1% and production declined by 0.2%. Monthly GDP rose by only 0.1% in August, suggesting that the economy retained momentum but was no longer expanding at the pace recorded earlier in the summer.
Switzerland Benefits from Pharmaceuticals and Exports
Switzerland has also yet to release its third-quarter GDP estimate. Its flash estimate is due on 16 November, followed by detailed figures on 30 November. The latest confirmed data show exceptionally strong growth of 1.5% in the second quarter, adjusted for major sporting events. This was Switzerland’s best quarterly performance since 2021.
Growth was supported by domestic demand, investment and exports, with the chemical and pharmaceutical industry making the largest contribution. Swiss authorities caution that the result probably overstates the economy’s underlying strength because almost half of the increase came from this highly volatile sector. Even so, the federal government has raised its forecast for Swiss economic growth in 2026 from 0.9% to 1.7%.
The ECB Faces a Difficult Interest-Rate Decision
Europe’s stronger economic performance is accompanied by renewed inflationary pressure. Annual inflation in the euro area reached 3.8% in September, rising from 3.2% in August and remaining far above the European Central Bank’s 2% target. Energy alone contributed 1.71 percentage points to the headline rate, while services added another 1.52 points.
The ECB has kept interest rates unchanged for now, but the combination of persistent inflation and better-than-expected growth could strengthen the case for another increase. Higher borrowing costs, however, would place additional pressure on households, companies and highly indebted governments. Europe has demonstrated greater resilience than many economists expected, but the recovery remains uneven—and its continuation will depend heavily on energy prices, monetary policy and the strength of global trade.