Euro area inflation edges closer to target in November with fall to 2.4%
investmentweek.co.ukInflation fell in twenty-one EU member states, remained stable in three and rose in three.
The fall marks a significant reduction from a year ago in November 2022, when the inflation rate sat at 10.1%.
The biggest contributor to euro area inflation last month came from services (1.7 percentage points), followed by food, alcohol and tobacco (+1.4), non-energy industrial goods (+0.8) and energy (-1.4).
Across the entire European Union, inflation also fell sharply compared to a year ago, coming in at 3.1% last month, a decrease from 3.6% in October, and down from 11.1% in November 2022.
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Inflation fell in twenty-one EU member states, remained stable in three and rose in three. The highest rates were recorded in the Czech Republic (8.0%), Hungary (7.7%), Slovakia and Romania (both 6.9%), and the lowest annual rates were registered in Belgium (-0.8%), Denmark (0.3%) and Italy (0.6%).
Core inflation also fell significantly, by 60 basis points to 3.6%, which Michael Field, European market strategist at Morningstar, noted that while still well above the ECB's target level of inflation, it is a «welcome move nonetheless».
As inflation was «now within touching distance» of its 2% target, the focus for the ECB will «certainly now shift to keeping the eurozone economy alive, an economy which has been teetering on the brink of recession in 2023», Field added.
«The ECB, like the other major central banks, has been using language in its interest rate policy statements to give itself the ability to hold-off on rate cuts should inflation rally again. However, today's number gives no suggestion of this happening soon,» he said.
Robert Schramm-Fuchs, fund manager at Janus Henderson,
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