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Euro-Area Inflation Rate Declines to 2.2% in November on Energy

Dec. 14 (Bloomberg) -- Euro-area inflation slowed in November as energy-price growth eased and the economy remained mired in its second recession in four years.

The annual inflation rate in the 17-nation currency bloc fell to 2.2 percent, in line with an initial estimate on Nov. 30, from 2.5 percent in October, the European Union’s statistics office in Luxembourg said today. In the month, prices fell 0.2 percent.

The European Central Bank last week left its benchmark interest rate unchanged at a record low of 0.75 percent even as President Mario Draghi said risks for the euro-area economy led policy makers to debate a reduction. The ECB forecasts gross domestic product will fall 0.5 percent this year and sees inflation for the year at 2.5 percent.

The core inflation rate, excluding volatile costs such as energy, alcohol and tobacco, dipped to 1.4 percent in November, today’s report showed. Energy costs rose 5.7 percent after an 8 percent increase in October.

Two successive quarters of contraction through September in the euro area are weighing on demand and stifling employment, which declined 0.2 percent in the third quarter after stagnating in the previous three months, a separate report showed today.

Europe’s biggest airline, Air France-KLM Group, said on Dec. 10 that it will reduce employee expenses by 400 million euros ($524 million) and capital spending by a further 500 million euros in the next two years to pare debt and expand profit margins.

To contact the reporter on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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