Fall in euro zone’s November core inflation boosts ECB’s policy easing stance

By FXStreet FXStreet (Mumbai) – Eurostat data released today showed annual inflation in the Eurozone came in at 0.1 per cent in November. While inflation remained unchanged from October, Eurostat’s data showed a drop in core inflation to 0.9 per cent, below October’s 1.1 per cent. Low energy prices continue to remain a drag in November. The harmonised consumer price index (HICP) came also remained below the 0.2 consensus. The HICP has been missing the two per cent growth target since 2013.

Draghi’s low core inflation concerns highlighted again

Food, services and non-energy industrial goods prices did improve year on year. However their growth rate is still below the European Central Bank’s two per cent target. Consumption, especially in the services sector has picked up but unfortunately did not reflect yet in services price inflation. Services prices increased only 1.1% year-on-year, declining from the 1.3% increase seen in October. This once again underlines ECB chief Mario Draghi’s low core inflation concerns.

Food, alcohol & tobacco grew 1.5% in November compared with 1.6% in October. Non-energy industrial goods prices increased 0.5% compared with 0.6% in October. Energy prices fell 7.3 per cent, less than the 8.5 per cent recorded previously. The low oil price …read more

Source:: FX Street