Euro Area Economy Shows Resilience as ECB Eyes Further Rate Hike
The euro area economy is showing resilience, with growth driven mainly by external demand in both France and Germany.
GDP growth for the second quarter was revised up to 0.45% quarter-on-quarter in the euro area, with France at 0.0% and Germany at 0.3%, according to Barclays.
The bank's strategists expect a further rate hike from the European Central Bank (ECB) in September, citing rising headline inflation that is expected to jump sharply in August.
Headline inflation in France rose to 2.7% year-on-year from 2.4%, while Spain jumped to 4.5% from 3.9%. Barclays tracks flash euro area HICP inflation at 3.39% year-on-year, slightly below its initial forecast of 3.44%.
ECB Executive Board member Isabel Schnabel warned that energy-related price pressures are becoming more persistent and increasingly extending beyond oil, suggesting rates may need to rise further.