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Inflation in the eurozone has fallen far more than expected to 2.4 per cent in November, the slowest annual pace since July 2021, providing some relief to consumers and fuelling hopes that interest rates could soon be cut.
Falling energy prices and lower growth in food and services prices were the main factors behind the slowdown in the harmonised index of consumer prices from 2.9 per cent in October, according to data published on Thursday by Eurostat, the EU’s statistics arm.
Economists polled by Reuters had expected a more modest slowdown to 2.7 per cent. The drop in inflation has prompted investors to bring forward their bets of when the European Central Bank could start cutting its deposit rate to as early as next April.
The euro extended its recent losses after the figures were published, trading 0.5 per cent lower against the dollar at $1.092.
The euro had already lost ground ahead of the data after separate figures showing French inflation fell more than forecast.