Capital Macro: Despite the strong rise in the economy in the third quarter, the European Central Bank is unlikely to slow down its interest rate cuts

According to Franziska Palmas, an analyst at Kepler Macro, the strong rise in the euro area will not suppress its interest rate cut as the Central Bank of Europe shifts its focus to economic activity. The euro area’s economy rose by 0.4% in the third quarter, which was better than expected as Germany, the largest member state of the euro area, avoided recession. Other major economies, including France and Spain, also recorded faster-than-expected growth. However, surveys show that future economic growth in the euro area will slow down and inflation will weaken. This means that the European Central Bank may still cut interest rates by 50 basis points in December.