Euro-Area Inflation Unexpectedly Accelerated in Novemberby
Consumer prices rose annual 0.2% vs 0.1% flash estimate
Energy costs slumped 7.3 percent due to lower oil prices
Euro-area inflation unexpectedly accelerated in November, the month before the European Central Bank stepped up its stimulus program.
Consumer prices rose an annual 0.2 percent, the European Union’s statistics Office said on Wednesday, an upward revision to the Dec. 2 estimate of 0.1 percent. That’s the highest rate since July.
While any pickup in inflation is good news for the ECB, the latest decline in oil prices suggests that price growth will struggle to reach its goal of just below 2 percent in the medium term. After new projections this month put inflation in 2017 at 1.6 percent, policy makers cut one of their key interest rates and extended quantitative easing by six months, increasing the program’s size to at least 1.5 trillion euros ($1.6 trillion).
Core inflation slowed to 0.9 percent in November from 1.1 percent the previous month, Eurostat said. Energy costs plunged 7.3 percent.
In a separate report, Markit Economics said output prices in manufacturing and services in the euro region continued to fall in December, which it said is a sign that companies were “generally unable” to pass higher costs on to customers.