If there had been a small chance of an ECB rate cut on December 18, the inflation figures published by Eurostat this morning have buried it for good.
In November, inflation in the 20 euro zone countries accelerated to 2.2%, from 2.1% in October. Analysts surveyed by Reuters expected an increase identical to that of the previous month.
Inflation in the euro zone. Sources: Eurostat, Trading Economics
This surprise rise is the result of a smaller drop in energy prices, while food prices and core inflation have remained stable.
Well positioned? for the moment
This data should push the ECB to maintain the status quo at its next meeting, on December 18. After eight consecutive rate cuts, the ECB has kept its main policy rate at 2% since June. A level considered as the neutral rate.
Not least because growth is holding up fairly well. OECD today raised its projections for the euro area to 1.3% this year, followed by 1.2% in 2026, compared with 1.2% and 1% in the previous estimate.
Nevertheless, the debate over rate cuts is not completely over. Because many forecasts, including the ECB's in September, expect inflation below target in 2026.
For the ECB, future rate moves will also depend heavily on the outcomes of Germany's relaunch stimulus.
The euro area's largest economy has stagnated for several years now, and everyone lives a bit on the idea that fiscal support will enable Germany to return to growth and become a driver for the entire euro area.
However, the lag effects are slow to materialize. The OECD has also reduced its growth outlook for Germany, which is now expected at only 1% in 2026.
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