- Chris Williamson, chief economist at survey compiler Markit
The Euro zone's annual inflation was unchanged in November, remaining far below the European Central Bank's target of just below 2%. According to Eurostat, the broadest measure of prices for goods and services was 0.1% higher last month compared with November 2014. Economists, however, had expected consumer prices to rise 0.2%. Lower than predicted inflation implies that the ECB is more likely to cut rates or deploy other stimulus measures that weaken the Euro. The annual rate of inflation has remained below 0.5% since mid-2014, and has not benefitted from a new stimulus programme initiated in March, under which more than 1 trillion euros of mostly government bonds will be bought through September 2016.
Moreover, the data, which came just a day before the central bank's meeting, showed that the core rate of inflation, which excludes prices for items such as energy and food, slipped to 0.9% from 1.1% in October. The decline came as prices for services and manufactured goods climbed at a slower pace, indicating a weakening of inflationary pressures coming from within the currency area.
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