The euro zone economy grew by 0.4% in Q3, surpassing expectations of 0.2%, with Spain and Ireland leading growth. Germany also posted slight growth, avoiding a forecasted recession despite manufacturing struggles.

Analysts anticipate a cautious recovery in business activity and consumer confidence amid lower interest rates and cooling inflation.

The ECB, which cut rates in October to 3.25%, is expected to reduce rates further in December, potentially by 25 or even 50 basis points, CNBC has reported.

However, upcoming inflation data could impact further cuts, with analysts noting growth strengths in countries like Spain and France.

Written by B.C. Begley