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Cheaper energy holds euro zone inflation down in Nov

Published 16/12/2016, 10:41
© Reuters. Women inspect a shop with reduced goods in the western city of Herne
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BRUSSELS (Reuters) - Cheaper gas and heating oil reined in consumer price growth in the euro zone in November, despite more expensive restaurants and cafes, rents and cigarettes, data from the European Union's statistics office Eurostat showed on Friday.

Eurostat said consumer prices in the 19 countries sharing the euro fell 0.1 percent month-on-month in November for a 0.6 percent year-on-year rise, an acceleration from the annual increases of 0.5 percent in October and 0.4 percent in September.

The European Central Bank wants to keep inflation below, but close to 2 percent and has been buying 80 billion euros (67.15 billion pounds) worth of government bonds a month to inject more cash into the banking system and induce higher lending to the economy to boost prices.

Volatile energy prices fell 0.2 percent on the month for a 1.1 percent year-on-year decline in November while also volatile unprocessed food costs rose 0.4 percent month-on-month for a 0.7 percent annual gain.

To gauge core inflation, the ECB looks at a measure of inflation without these volatile components, which showed prices easing 0.1 percent month-on-month for a 0.8 percent annual rise.

© Reuters. Women inspect a shop with reduced goods in the western city of Herne

This is up from 0.7 percent year-on-year in October, but the same as in four previous months, which suggests that core inflation has not yet responded to the ECB's ultra-loose monetary policy.

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