Frankfurt
Inflation continues to fall: Consumer prices in the eurozone rose 2.4% year on year in November – slower than the rate of 2.9% recorded the previous month and to not far off the 2% target of the European Central Bank (ECB). Food, alcohol and tobacco marked the highest rate of inflation at 6.9% (down from 7.4% in October), while energy prices were 11.5% lower than a year earlier. Core inflation, which strips out volatile food and energy prices, rose by an annual 3.6%, from 4.2%.
Headline consumer prices are now rising at the slowest pace since July 2021, “[calling] into question the… ECB’s view that inflation will be higher for longer”, says Kate Marshall of Hargreaves Lansdown. ECB president Christine Lagarde insisted last week that the war against inflation wasn’t yet won, but that hasn’t stopped markets pencilling in an interest-rate cut as early as 2024. Either the ECB keeps rates high and risks pushing the bloc into recession or it cuts rates and risks keeping inflation high. Last week, the ECB decided to keep interest rates
