- Barclays
Eurostat confirmed that Euro zone's consumer prices rose 0.3% in November from the same month last year on falling fuel and heating oil prices, which subtracted 0.22 percentage point from the final result. Measured on a monthly basis, inflation in the Euro bloc fell 0.2%, compared with a 0.1% decline in October. Excluding energy, food, alcohol and tobacco, core consumer prices rose 0.7% in November.
A growing number of economists are concerned that the Euro area could slip into deflation next year, as falling oil prices add to the disinflationary pressures in the region. Many economists expect the ECB to expand its asset-purchase programme early next year, which might include sovereign bonds buying. However, the central bank's governing council remains split by disagreement over the necessity of more actions now, with some policy makers preferring to remain in a wait-and-see mode to assess the full effect of recent monetary easing measures. Nevertheless, the ECB said it will reassess the existing stimulus policies, which include cheap bank loans as well as purchases of asset-backed securities and covered bonds, in early 2015, and decide whether to step up efforts to ensure that annual inflation moves closer to the goal of just below 2%. However, further decline in the Euro zone inflation will add pressure on the ECB to take more decisive and radical measures.
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