The stalls at the 590th Dresden Striezelmarkt were brightly lit at the opening.
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Statistics agency Eurostat said on Friday that the euro zone’s annual inflation rate rose to 2.3% in November, once again above the European Central Bank’s 2% target.
Economists polled by Reuters had expected annual interest rates to be 2.3% this month, up from 2% in October.
As the deflationary effect of energy prices weakened, as expected, the group’s price growth increased for two consecutive months after falling to 1.7% in September.
Core inflation, which excludes volatile energy, food, alcohol and tobacco prices, remained at 2.7% for the third consecutive month in November.
The core rate was supported by the stickiness of services sector inflation, which fell only slightly to 3.9% in November from 4% the previous month.
Markets have fully priced in the European Central Bank’s 25 basis point interest rate cut in December, which will mark the agency’s fourth rate cut this year.
Speculation that the central bank might be forced to cut interest rates by a further 50 basis points has faded since last month as the weak euro zone growth outlook improved slightly and inflation rebounded.
Inflation is coming Slightly higher than forecast In October, ECB policymakers, including Executive Board member Isabelle Schnabel, had Emphasize the need for caution In terms of monetary easing.
The ECB’s decision will depend largely on the latest macroeconomic forecasts received ahead of its upcoming meeting on December 12. The central bank will also weigh the potential global impact of Donald Trump’s recent election as U.S. president, including whether he will follow through on his policies. Threat of widespread trade tariffs and how this move will affect EU exports.
this EUR It was slightly higher against the dollar and pound after the data was released.
Kyle Chapman, foreign exchange market analyst at Ballinger Group, said in an emailed report that the rise in overall inflation is entirely due to year-over-year fluctuations in energy prices, and that the European Central Bank will be optimistic about a 0.9 percentage point drop in energy prices this month. Monthly Services Inflation.
“With the growth outlook looking weak, there is no question that inflation will fall sustainably to 2% next year,” Chapman said, adding that despite this, the market appears to have decided on a 25 basis point rise in December.
“The economy has not yet fallen off a cliff and there is uncertainty about where the neutral rate will be, so there is no urgent need to start cutting rates early,” he noted.
