The Eurozone saw its annual inflation rate increase to 2.3% in November, up from 2% in October, according to Eurostat’s flash estimate. While this figure exceeds the European Central Bank’s 2% target, it aligns with market expectations. On a monthly basis, prices actually decreased by 0.3%.
Core inflation, which excludes volatile components like energy, food, alcohol, and tobacco, remained steady at 2.7%. The service sector led the price increases with a 3.9% rise, while food, alcohol, and tobacco prices grew by 2.8%. Non-energy industrial goods saw a modest 0.7% increase, and energy prices bucked the trend with a 1.9% decline.
Among member states, Belgium recorded the highest inflation at 5%, followed by Croatia at 4%. Ireland maintained the lowest rate at 0.5%. The complete inflation report, including data for the entire European Union, will be released on December 18.
This latest inflation reading may influence the ECB’s approach to interest rate decisions, potentially leading to more cautious rate cuts, according to Reuters. The central bank, which began reducing rates in June to stimulate economic growth, last cut its deposit rate to 3.25% in October. The next monetary policy decision is scheduled for December 12.