Financial News: Eurozone Inflation Accelerates To 2.3%

Eurozone Inflation Accelerates To 2.3%

11/29/2024 - 10:51:00 (RTTNews)

(RTTNews) - Euro area inflation climbed for a second straight month in November, while the core figure was unchanged, making way for a cautious interest rate cut by the European Central Bank next month.

The harmonized index of consumer prices, or HICP, rose 2.3 percent year-on-year following a 2.0 percent increase in October, preliminary data from the statistical office Eurostat showed on Friday. The rate was in line with economists' expectations.

Core inflation, which excludes prices of food, energy and alcohol and tobacco, was steady at 2.7 percent. Economists had forecast a score of 2.8 percent.

"With demand expected to remain weak, it doesn't look like the ECB should be overly concerned about the current uptick in inflation," ING economist Bert Colijn said.

"While December is likely to come in high again when it comes to headline inflation, moderation can be expected for early next year."

The latest uptick in inflation is as expected and hence, the ECB will see its monetary policy as having been successful and will cut key rates again in December, Commerzbank economist Vincent Stamer said. Commerzbank expects a 25 basis points interest rate cut in December.

Among the main components, services inflation slowed to 3.9 percent from 4.0 percent. Energy prices declined for a fourth month in a row, down 1.9 percent following a 4.6 percent slump in the previous month.

Prices of food, alcohol and tobacco rose 2.8 percent after a 2.9 percent increase in October. Non-energy industrial goods prices were 0.7 percent higher after a 0.5 percent gain.

The HICP decreased 0.3 percent month-on-month in November reversing a similar gain from the previous month.

Preliminary estimates from the German statistical office Destatis showed on Thursday that the <a href=https://www.rttnews.com/3493683/german-inflation-rises-to-2-2.aspx target=_blank >consumer price inflation</a> in the biggest Eurozone economy increased further in November to 2.2 percent, the highest level in four months.

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