Europe’s inflation rate has risen to an annualized 2.3% in November, according to statistics agency Eurostat.
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The latest inflation reading for the European Union (EU) matched the consensus expectation of economists polled by the Reuters (TRI) news agency. However, the November inflation rate was up from 2% in October and ahead of the European Central Bank’s 2% annualized target.
Consumer prices throughout Europe have now risen for two consecutive months after falling to a multi-year low of 1.7% in September. The latest rise in inflation is being blamed on an increase in oil and natural gas prices heading into winter.
December Rate Cut Expected
Core inflation, which excludes volatile energy, food, alcohol and tobacco prices remained unchanged in November at an annualized rate of 2.7%. The core rate is being kept high by service inflation, which rose 3.9% in November.
The latest inflation reading appears to have bolstered expectations for the European Central Bank to lower interest rates 25-basis points at its upcoming December meeting. Financial markets have fully priced in a quarter percentage point rate cut in December, which would mark the central bank’s fourth reduction this year.
The European Central Bank is next scheduled to make a decision on interest rates December 12.
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