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Euro-area inflation eased off a six-year high just as the European Central Bank is set to pare back monetary stimulus and issue new macroeconomic forecasts.
Consumer prices rose 2% in November from a year earlier, down from 2.2% in October. A measure that strips out volatile components slipped to 1%, Eurostat said on Friday.
Although inflation has held near the ECB’s target of a little less than 2% for six months, that’s mostly the work of high energy costs. Still, President Mario Draghi and his peers have stuck to their plans to cap quantitative easing at €2.6trn ($3trn) at the end of the year.
Their decision on December 13 will be informed by updated projections for economic growth and inflation, which will allow them to better judge the implications of the most recent slowdown on the broader outlook.
The European Commission said on Thursday that economic sentiment in the region weakened for an 11th straight month in November as a soft patch in manufacturing has started to seep into consumer confidence. That’s an ominous sign for economic growth - already at a four-year low - in the final quarter.
Analysts have questioned whether the weaker momentum and turmoil in Italy could force a rethink on stimulus withdrawal, or warrant other support measures such as a new round of long-term loans. But Draghi maintained his view this week that some of the weakness is temporary, with policy makers expecting to focus their discussion in two weeks on how to reinvest existing debt when it matures.
Eurostat also released jobless data on Friday, which showed the unemployment rate held at 8.1% in October.
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