Euro-Area Factory-Gate Inflation Returns After More Than 3 Years

  • Producer prices rise annual 0.1%, first increase since 2013
  • Pickup in inflation measures seen sparking stimulus debate

Producer-price inflation returned to the euro area in November after more than three years, adding to signs that cost pressures are building as the 19-nation economy strengthens.

Prices charged at the factory gate rose 0.1 percent from a year earlier, the European Union’s statistics office in Luxembourg said on Thursday. The increase comes as a surprise to economists surveyed by Bloomberg and follows 40 consecutive declines. Prices were up 0.3 percent from October.

The data come a day after Eurostat said consumer inflation accelerated to 1.1 percent in December, the fastest since 2013 -- a report that is set to reinforce a debate about the appropriate degree of monetary stimulus. In Germany, where prices are rising at a stronger pace, economists including Ifo President Clemens Fuest are already calling for an end of quantitative easing while Bild, the country’s most-read newspaper, has urged ECB President Mario Draghi to raise interest rates.

German producer prices rose 0.1 percent in November from the previous year. The strongest increase, at 4.1 percent, was recorded in Belgium and the biggest decline -- 6.5 percent -- was registered in Luxembourg.

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