Euro inflation details – Have prices fallen in November?

Details confirm extremely low core rate

According to the final figures from Eurostat and the ECB, consumer prices excluding energy, food, alcohol and tobacco (core rate) fell by 0.04% in seasonally adjusted terms in November compared to October. This is only the second negative monthly value in the last three years and is significantly less than the average of the last three months (Chart 1). However, our analyses show that core inflation could have been higher than assumed. Using an alternative seasonal adjustment procedure, core inflation measured against the previous month rises to 0.10%. If the rate is further adjusted for particularly volatile components of services prices (such as transport services), the month-on-month rate of core inflation would be 0.17%. This implies that the annualized rate is almost exactly in line with the ECB's target of two percent. We will discuss these details in the following sections.

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