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EU inflation falls to 2.4% in November

Lower-than-expected EU CPI fuels speculation of interest rate cuts next year.

30 November 2023

EU Consumer Price inflation for November came in much lower than estimated, showing a 2.4% annualised print (against estimates of 2.7%) - a much faster slowdown compared to October’s 2.9%. Core inflation had a slightly bigger quantum shift downwards, recording an annual rate of 3.6% in November (versus 3.9% expected), compared to October’s 4.2% print.

Rates markets are predictably cheering these numbers as they bring forward the expectation of rate cuts from the European Central Bank (ECB). But before we get too carried away, and even with slowing growth (and negative quarterly economic growth reported this morning in France), inflation could still move up again over the next few months as the government energy support for households at the end of last year rolls off the year-on-year comparisons. ECB members are obviously not giving much away about any future rate cuts just yet as the 2% inflation target is now firmly in view.

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Charles Hepworth

Investment Director
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