Eurozone inflation unexpectedly accelerated in November

Consumer prices in the eurozone rose by 2.2% year-on-year in November, exceeding the European Central Bank's (ECB) target for the third consecutive month. The regulator's benchmark is 2%. The actual value turned out to be higher than the consensus forecast of Reuters, which assumed the preservation of the rate of price growth at the level of 2.1%.

Inflation in services accelerated from 3.4% in October to 3.5% and reached the highest level since April. At the same time, the decline in energy prices slowed from 0.9% to 0.5% in November. Annual inflation in the currency bloc's largest economy, Germany, jumped from 2.3% in October to 2.6% in November - above market expectations. In contrast, price growth in Spain slowed from 3.2% to 3.1% and in the Netherlands from 3% to 2.6%. Inflation in France and Italy remained well below the ECB target of 0.8% and 1.1%, respectively.

At its final meeting of the year on December 18, the ECB is expected to keep its benchmark interest rate at 2%, the Financial Times notes. Between mid-2024 and mid-2025, the regulator has already conducted eight rounds of easing, cutting borrowing costs in half. The rate has not changed at the last three meetings.

ECB chief Christine Lagarde said last week that "the interest rates where we left off at recent meetings have been set correctly". However, discussions of a cut could resume with renewed vigor in early 2026 if inflation falls below target amid a continued fall in energy costs, Reuters warns.

This article was AI-translated and verified by a human editor