Eurozone: It is too early to talk about a victory over inflation – Commerzbank

According to Eurostat's provisional calculations, annual inflation in the Eurozone inflation eased to 2.4% year-on-year. Economists at Commerzbank analyze the report the Eurozone Harmonised Index of Consumer Prices (HICP) report.

Euro Area inflation surprises again

In the Euro Area, inflation fell by 0.5 percentage points to 2.4% in November, a much stronger decline than expected. The sharp fall in the inflation rate for services was particularly surprising. Core inflation even fell from 4.2% to 3.6%. 

Today's price data is likely to fuel speculation that the ECB will soon cut its key interest rate. However, we think it is too early to declare victory over inflation, given the strong rise in wages.