Euro Area: Inflation moderates in November
Harmonized inflation surprised markets on the downside and declined to 10.0% in November from Octobers 10.6% reading, which had marked the highest print in the series history. It therefore moved somewhat closer to the European Central Banks target rate of 2.0%.
Novembers result was due to slower increases in the prices for energy and services. Meanwhile, prices for food, alcohol and tobacco rose at a faster pace, while the increase in prices for non-energy industrial goods and services was steady. Meanwhile, the annual rate of core inflation, which excludes volatile energy and unprocessed foods prices, rose to 6.6% in November from Octobers 6.4%—marking the highest print since records began.
On a monthly basis, harmonized consumer prices fell 0.9% in November, contrasting Octobers 1.5% jump.
Commenting on the release, Bert Colijn, senior economist at ING, noted:
“For the ECB, tentative signs of inflation peaking are mounting, evidence of a wage-price spiral continues to remain absent and the environment is turning recessionary. In our view, that is likely to sway the ECB from 75 basis point hikes to a smaller hike of 50 basis points in December.”