Eurozone inflation remains negative on energy, industrial goods

Jonathan Lopez

01-Dec-2020

LONDON (ICIS)–The eurozone’s inflation rate was unchanged in November at a negative 0.3%, year on year, on the back of lower energy and industrial goods prices, the statistical office Eurostat said on Tuesday.

Inflation in the 19-country currency area has been negative since August.

Financial analysts said the lacklustre figures are likely to prompt the European Central Bank (ECB) to approve more stimulus measures to prop up prices in its upcoming December meeting.

The November inflation reading remained far lower than the ECB’s target of keeping inflation close to, but below, 2%.

All major economies within the eurozone, apart from France (0.2%), posted negative annual inflation rates in November – Germany (-0.7%), Italy (-0.3%) and Spain (-0.9%).

Only seven out of 19 countries posted positive inflation rates, a clear sign of the economic damage inflicted by the coronavirus pandemic on the eurozone economy.

“While inflation is seen edging up over the next few months, this will not prevent the ECB from implementing more stimulus already in the upcoming December meeting,” said analysts at Oxford Economics.

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