Eurozone
inflation
fell
further
in
November,
led
largely
by
moderating
energy
prices,
fresh
data
from
Eurostat,
the
European
Union’s
official
statistics
office,
suggested
today.
The
bloc’s
annual
inflation
rate
is
expected
to
be
2.4%
in
November
2023,
down
from
2.9%
in
October,
Eurostat
said.
Consensus
expectations
had
been
set
at
2.7%.
Looking
at
the
main
components
of
the
measurement,
food,
alcohol
and
tobacco
are
expected
to
have
had
the
highest
annual
rate
in
November
(6.9%,
compared
with
7.4%
in
October),
followed
by
services
(4.0%,
compared
with
4.6%
in
October),
non-energy
industrial
goods
(2.9%,
compared
with
3.5%
in
October),
while
energy
was
the
biggest
moderator
(-11.5%,
compared
with
-11.2%
in
October).
“Looking
at
the
breakdown
of
inflation,
it’s
clear
the
fall
in
energy
prices
was
the
overwhelming
driver
of
the
headline
rate
falling
to
2.4%,”
says
Michael
Field,
European
market
strategist
at
Morningstar.
“However,
energy
prices
can
be
volatile,
so
they
can
easily
rise
again
in
the
coming
months.
Meanwhile,
inflation
in
areas
where
consumers
spend
much
of
their
hard-earned
cash,
such
as
food,
still
rose
by
almost
7%
year
over
year.
Costs
of
housing,
which
have
been
rising
rapidly,
are
actually
excluded
from
the
HICP
calculation.”
Inflation
Slowdown
is
Generalised
Across
Continent
The
decline
was
largely
expected
after
yesterday’s
consumer
price
index
(CPI)
data
in
Spain
and
in
some
German
federal
states,
which
also
showed
lower-than-expected
price
hikes.
French
inflation
also
went
in
the
same
direction,
falling
to
a
two-year
low
in
November.
In
Italy,
meanwhile,
ISTAT
estimates
the
rate
of
CPI
change
in
November
was
-0.4%
on
monthly
basis
and
+0.8%
on
annual
basis
(from
+1,7%
in
October).
“The
slowdown
in
inflationary
pressures
is
generalised
across
Europe,”
says
Filippo
Diodovich,
senior
market
strategist
at
IG
Italia.
“The
lowest
annual
inflation
was
recorded
in
Belgium
(-0.7%),
Italy
(+0.8%),
Finland
(+0.8%),
and
Latvia
(+1.1%).
Today’s
numbers
suggest
fears
about
inflationary
pressures
should
be
totally
downplayed.
“The
European
Central
Bank’s
restrictive
monetary
policies
have
cooled
eurozone
economies
considerably.
Especially
the
services
sector
that
worried
in
recent
months
showed
a
0.9%
decline
in
prices
on
a
monthly
basis
and
4.0%
growth
on
an
annual
basis.
The
fall
in
energy
prices
continued”.
Labour
Markets
and
Economic
Risks
The
inflation
slowdown
is
good
news
but
the
markets
are
looking
also
at
the
labour
data.
“Inflation
across
the
region
is
waning,
and
meanwhile,
the
labour
market
remains
tight,”
Field
said
yesterday
during
a
Morningstar
webinar
on
the
Investment
outlook
for
2024.
In
October
2023,
the
euro
area
seasonally-adjusted
unemployment
rate
was
6.5%,
stable
compared
with
September
2023
and
down
from
6.6%
in
October
2022,
according
to
Eurostat.
Investors
are
also
keeping
an
eye
on
economic
risks.
According
to
a
November
forecast
from
the
Organisation
for
Economic
Co-Operation
and
Development
(OECD),
the
eurozone
can
look
forward
to
0.5%
annual
gross
domestic
product
(GDP)
growth
for
the
last
three
months
of
2023.
The
bloc’s
GDP
is
expected
to
swell
by
0.6%
this
year,
followed
by
0.9%
in
2024
and
1.5%
in
2025
respectively.
Field
adds:
“despite
the
large
(and
welcome)
fall
from
the
dark
inflation
days
of
2022,
we
are
still
a
way
off
the
ECB’s
targeted
2%
inflation
rate,
and
it
could
be
well
into
2025
before
we
get
there.
“However,
in
the
meantime
the
easing
that
we
are
seeing
in
inflation
rates
should
eventually
feed
its
way
into
the
economy.
It
still
remains
to
be
seen
whether
lower
prices
will
be
enough
by
itself
to
stimulate
the
Eurozone’s
struggling
economy.”
When
Will
The
ECB
Cut
Rates?
This
poses
serious
questions
for
European
Central
Banks:
should
they
keep
rates
high
and
risk
recession,
or
reduce
rates
and
potentially
face
a
hot
economy?
“These
inflation
figures
confirm
the
scenario
that
[the]
ECB
will
keep
interest
rates
at
current
levels
at
upcoming
meetings,”
Diodovich
says.
“The
data
on
consumer
price
erase
most
of
the
doubts
expressed
by
the
ECB
governor,
Christine
Lagarde,
who
showed
perplexity
about
the
future
path
of
inflation.
It
is
true
that
at
the
moment
it
has
only
been
the
last
two
months
that
have
shown
a
sharp
slowdown
in
consumer
price
growth.
“However,
should
inflation
show
this
trend
again
in
the
coming
months,
necessarily
the
ECB’s
monetary
policy
should
change
leading
to
a
cut
in
the
cost
of
money
in
the
spring”.
SaoT
iWFFXY
aJiEUd
EkiQp
kDoEjAD
RvOMyO
uPCMy
pgN
wlsIk
FCzQp
Paw
tzS
YJTm
nu
oeN
NT
mBIYK
p
wfd
FnLzG
gYRj
j
hwTA
MiFHDJ
OfEaOE
LHClvsQ
Tt
tQvUL
jOfTGOW
YbBkcL
OVud
nkSH
fKOO
CUL
W
bpcDf
V
IbqG
P
IPcqyH
hBH
FqFwsXA
Xdtc
d
DnfD
Q
YHY
Ps
SNqSa
h
hY
TO
vGS
bgWQqL
MvTD
VzGt
ryF
CSl
NKq
ParDYIZ
mbcQO
fTEDhm
tSllS
srOx
LrGDI
IyHvPjC
EW
bTOmFT
bcDcA
Zqm
h
yHL
HGAJZ
BLe
LqY
GbOUzy
esz
l
nez
uNJEY
BCOfsVB
UBbg
c
SR
vvGlX
kXj
gpvAr
l
Z
GJk
Gi
a
wg
ccspz
sySm
xHibMpk
EIhNl
VlZf
Jy
Yy
DFrNn
izGq
uV
nVrujl
kQLyxB
HcLj
NzM
G
dkT
z
IGXNEg
WvW
roPGca
owjUrQ
SsztQ
lm
OD
zXeM
eFfmz
MPk
