German inflation falls by more than expected
German inflation eased in November to the lowest level for more than two years, official data showed on Wednesday.
According to provisional data from Destatis, the Federal Statistical Office, the consumer price index was 3.2% in November compared to the same month a year previously. That compares to October’s rate of 3.8%, and consensus for 3.5%.
It was also the lowest level since June 2021, when CPI was 2.4%.
The harmonised index of consumer prices was 2.3% year-on-year, down 0.7 percentage points on October and also below forecasts, for 2.7%.
All eurozone countries use the same method to calculate HICP.
One of the main drivers was a 4.5% year-on-year drop in energy prices, which Destatis said had a "particularly dampening effect" on the November rate.
Food prices continued to rise, up 5.5%, but at a slower pace than in previous months.
Core inflation, which excludes more volatile food and energy prices, was 3.8%, compared to 4.3% in October. Forecasts had been for 3.7%.
Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "The headline was pulled lower by falling inflation across all main components.
"Remember that energy inflation will snap back in December due to base effects from last year’s one-off energy subsidy. But that won’t change the underlying down trend. The data remain consistent with our view that Eurozone inflation is falling more quickly that the European Central Bank expected in September."
Carsten Brzeki, global head of macro at ING Research, said: "The next stage of disinflation will be driven by the ECB’s monetary policy tightening. The weakening of demand, as a result of higher interest rates, should lead to actual price drops in the coming months. This is already reflected in selling price expectations, which have started to come down significantly in the services sector.
"German headline inflation should drop further in December, and settle down in the 2% to 3% range in 2024."