“The currency bloc’s economy is faced with a mounting set of economic challenges,” Benjamin Trevis, an economist at the Centre for Economic and Business Research (CEBR), said.
“Inflation, though down on the previous month, stood at ten percent in November, the second highest level on record. All else equal, high inflation will erode spending power and resultant interest rate increases will slow activity among both consumers and businesses. These developments are likely to translate into higher unemployment during 2023, as firms reduce hiring intentions in line with the weaker wider economy,” he added.
Price pressure eased from 10.6 percent last month, sparking hopes the European Central Bank will slow the pace of interest rate hikes to 50 basis points from 75 basis points next month.