By Ed Frankl
Inflation fell significantly more than expected in the eurozone in November, closing in on the European Central Bank’s target, dragged down by lower energy prices.
The bloc’s consumer price index–a measure of the cost of goods and services–rose 2.4% on year, slowing from 2.9% the previous month, according to preliminary data published by the European Union’s statistics agency Eurostat on Thursday.
Economists polled by The Wall Street Journal had expected prices to rise on year by more, to 2.8% on year. On month, consumer prices fell 0.5%, Eurostat said.
That means the headline rate is cooling toward the ECB’s 2% inflation target, and all but confirms that the central bank’s recent unprecedented hiking cycle is over. The ECB’s key deposit rate has jumped from minus 0.5% in June 2022 to 4.0% in September this year.
Core inflation, which removes volatile energy, food, alcohol and tobacco prices–and is watched closely by ECB policymakers as a reflection of underlying inflationary trends–dipped to 3.6% from 4.2%.
Overall inflation, was dragged down by energy prices, which were 11.5% lower on year in November, more than the 11.2% fall recorded in October. It comes as oil prices have fallen on the international market, despite geopolitical concerns over conflicts in the Middle East and Ukraine.
Food prices in the eurozone, meanwhile, eased to 6.9% in November from 7.4% in October, while services inflation ticked down to 4.0% from 4.6% in the prior month.
Among the bloc’s largest economies, annual inflation fell in Germany to 2.3%, in France to 3.8%, in Italy to 0.7% and in Spain to 3.2%, according to EU-harmonized data.
Write to Ed Frankl at edward.frankl@wsj.com
