Euro area inflation rises slightly

Inflation is rising due to base effects

According to preliminary data from Eurostat, the inflation rate rose to 2.3% in November (from 2.0% in October). The economists surveyed in advance had expected with this rate of inflation. Inflation rose particularly sharply for energy prices, which are prone to fluctuation (from -4.6% in October to -1.9%). The core inflation rate, excluding energy, food and beverages, remained constant at 2.7%, slightly surprising on the downside.

The rise in inflation is not a surprise overall. This is because the bulk of the increase in November can be explained by a base effect. This is because the decline in energy prices a year ago is dropping out of the year-on-year comparison this month. Without this effect, the inflation rate would hardly have risen. At the beginning of next year, the base effect could reverse again and even push the inflation rate down noticeably.

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