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Euro zone annual growth exceeds U.S., backs ECB QE taper

Inflated euro sign is seen outside the headquarters of the European Central Bank (ECB) in Frankfurt, in this file photo.

© Kai Pfaffenbach / Reuters

The euro zone economy grew by more than the United States in the third quarter compared with a year earlier, data showed on Tuesday, supporting the European Central Bank's move to begin reducing its bond-buying program.

The European Union's statistics office Eurostat confirmed its estimate from Oct. 31 that the gross domestic product (GDP)of the 19 countries using the euro grew by 0.6 per cent in July-September from the previous three months and was 2.5 per cent higher than in the same period of 2016.

In the United States, the economy grew 0.7 per cent quarter-on-quarter and 2.3 per cent year-on-year in the third quarter. The annual rate was also greater in the euro zone in the second quarter.

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The euro zone growth rate also exceeded that of Britain, which will leave the European Union in March 2019. Its economy expanded 0.4 per cent quarter-on-quarter and 1.5 per cent year-on-year.

Separately, Eurostat said euro zone industrial production fell by 0.6 per cent month-on-month in September as expected by markets but rose 3.3 per cent year-on-year, slightly beating economists' average forecast of a 3.2 per cent increase.

In October, the ECB took its first step towards weaning the euro zone off ultra-loose money by saying that from January it will halve the amount of bonds it buys every month to €30-billion (£26.8 billion). It nevertheless promised years of stimulus and left the door open to backtracking.

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