European Inflation Ascends to 2.3%, Dampening ECB Rate Cut Expectations
European markets concluded higher on Friday, as investors absorbed pivotal inflation data that could sway the European Central Bank’s (ECB) policy decisions in December. Euro zone inflation escalated from 2% in October to 2.3% in November, aligning with economists’ forecasts but persisting above the ECB’s 2% target.
The surge in inflation is anticipated to fortify arguments for a more prudent approach from the ECB at its forthcoming December 12 meeting. “Today’s data coupled with the increase in negotiated wage growth in Q3, record low unemployment figures and decent money and credit data suggest to us that the ECB will stick with a gradual pace of easing,” stated Melanie Debono, senior Europe economist at Pantheon Macroeconomics.
France’s harmonized inflation rate registered at 1.7% in November, a slight increase from 1.6% in October, according to preliminary data. This data bolsters expectations that the ECB will likely implement a modest 25 basis point rate cut in December, rather than a more aggressive reduction.
Source: CNBC