From Morningstar: 2024-11-29 07:13:11

Consumer prices in the eurozone rose by 2.3% in November, slightly below expectations but above the European Central Bank’s 2% target. Core inflation, excluding energy and food costs, increased by 2.7% year on year. Services inflation, particularly wage rates, was a key driver of the increase.

In November 2024, services were the biggest contributors to the euro area inflation rate, followed by food, alcohol & tobacco, non-energy industrial goods, and energy. Weak eurozone demand is expected to lead to softer inflation next year. Upward pressure on prices is likely to remain due to rising commodity prices and a weakening euro.

German headline inflation reached 2.2% in November, up from 2.0% in October. Spain saw a 2.4% inflation rate, driven by fuel and electricity prices, while Italy’s consumer price index rose by 1.4% annually. German inflation rebounded due to energy base effects and timing of school vacations.

The ECB’s next monetary policy meeting on Dec. 12 will consider a possible interest rate cut. Markets anticipate a 25 basis points cut, the fourth in 2024. A larger cut of 50 basis points is less likely after inflation exceeded the ECB’s target. Lower interest rates could benefit European equities in 2025.



Read more at Morningstar: Eurozone Inflation Rises Above ECB’s Target in November