Eurozone inflation reaches record highs of 4.9%, expanding into non-energy category


According to official data, consumer price inflation in 19 euro-currency countries accelerated from January to November at the fastest pace since the record began in 1997.

Eurostat, the European Union’s statistical agency, said in its November 30 release (pdfThe Eurozone Consumer Price Index (CPI), which measures inflation from the perspective of the end consumer of goods and services, rose 4.9% in the 12 months to November, the highest ever.Consensus forecast Quoted by FX Street We expected a much lower inflation rate of 3.7 percent.

Soaring energy costs are behind most of the rise in headline inflation indicators, with energy inflation rising 27.4% annually.

Another indicator, called the Core CPI, which excludes the variable categories of food and energy, is 2.6% in the year to November, as a sign that high energy costs are not the only sign that pushes eurozone prices up. It has risen.

“The sharp rise in service inflation from 2.1% to 2.7% and the sharp rise in inflation in non-energy industrial products from 2% to 2.4% suggests that inflation is above 2%. “We are,” said the ING analyst. I wrote in a memo..

“Therefore, with slow wage growth, consumers are now facing a significant rise in prices, pushing real wage growth significantly into the red,” they added.

ING analysts expect inflationary pressures in the euro area to ease as energy costs fall, and as supply chain bottlenecks disappear, the supply side of commodity production will move forward. We anticipate that the factors will be the dominant factors.

“The big question mark is about rising commodity prices. Pipeline cost pressures haven’t eased yet, commodities inflation is expected to rise most of 2022, and energy inflation weakens, leading to headline inflation. It will be a driving force. “

Overall, ING analysts do not expect inflation to fall significantly below 2% at the end of 2022 due to rising price pressures over the medium term.

The recently discovered Omicron variant of the CCP (Chinese Communist Party) virus has also created uncertainty in the eurozone and global economic outlook, raising expectations that central banks will refrain from immediately announcing major policy changes.

Still, ING analysts expect the European Central Bank (ECB) to announce its end. Pandemic emergency purchase program In March 2022, we noted rising market expectations that the ECB’s first post-pandemic rate hike would approach the beginning of 2023.

Tom Ojimek


Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communication, and adult education. The best writing advice he has ever heard is from Roy Peter Clarke.