Annual inflation in the eurozone rose to 2.3% in November, up from 2% in October, according to preliminary figures from Eurostat.
This increase aligns with market expectations and reflects the diminishing deflationary effects of energy prices. While the annual rate is slightly above the European Central Bank’s (ECB) target, the monthly data shows a promising trend: consumer prices dropped by 0.3% from October, marking the steepest monthly decline since January 2024.
This monthly decline supports expectations that disinflation is underway, possibly opening the door for further ECB rate cuts. Energy prices were 1.9% lower year-on-year in November, although the drop was less significant than the 4.6% and 6.1% decreases in September and October. On a monthly basis, energy prices rose by 0.6%.
Excluding energy, annual inflation remained at 2.7%, while core inflation—which strips out both energy and food—rose to 2.8% year-on-year, up from 2.7% in October. Monthly core inflation fell by 0.4%, indicating that underlying price pressures may be easing.
In a sign of broader economic difficulties, Germany reported its worst retail sales drop in two years, highlighting challenges within the region’s economy. Services prices, which are known for being more resistant to change, increased by 3.9% year-on-year but fell by 0.9% from October, offering some hope for the future inflation outlook.
