Ireland props up eurozone growth while France shrinks and gets a warning from Fitch

The eurozone economy grew 0.4 percent in the third quarter compared with the previous quarter, according to a preliminary Eurostat estimate. Trends reports, citing ABM, that this is slightly slower than the 0.6 percent of the second quarter. Business AM points out that the figure is heavily coloured by Ireland, which grew 5.5 percent; without it, growth would have been 0.2 percent. Germany came in at 0.2 percent and Spain at 0.6 percent, while Italy stagnated.

France shrank 0.1 percent, its third straight quarter without growth or with a contraction, Business AM writes, citing statistics office Insee. Household spending rose 0.4 percent, but investment fell 0.6 percent and foreign trade knocked 0.6 percentage points off GDP. French inflation rose from 3.1 to 3.4 percent in October, while in Spain it held at 4.9 percent, Trends reports. In Germany inflation fell from 3.3 to 2.8 percent, mainly thanks to a new cut in fuel taxes, according to Business AM.

On Friday evening, ratings agency Fitch said it was changing the outlook on France's credit rating from stable to negative, HLN and De Morgen report. The rating itself stays at A+, but a downgrade is now possible. According to La Libre, Fitch cites weaker growth, a fresh budget slippage, higher interest rates and persistent political fragmentation. French Economy Minister Roland Lescure says it is absolutely essential to adopt a budget by the end of the year that targets a deficit of 5 percent.

The labour market is stable but less favourable than a year ago. Eurozone unemployment held at 6.5 percent in September, compared with 6.3 percent in September 2025, Business AM reports, citing Eurostat. Among under-25s it rose from 15.1 to 15.4 percent. In September, eurozone inflation climbed to 3.8 percent, the highest in three years, prompting some economists to warn of stagflation, according to Business AM.