Euro Area Consumer Prices Rise

Euro Area annual inflation is expected to be 0.6% in November 2009 according to a flash estimate issued by Eurostat. It was -0.1% in October.

European consumer prices increased for the first time in seven months in November led by energy costs as the economy recovered from the worst slump since World War II.

Oil prices have risen 9 percent in the past three months as the economy has gathered strength. While the euro-area economy returned to growth in the third quarter, companies continue to cut costs and eliminate jobs to bolster earnings. The European Central Bank has signaled it sees moderate” inflation and is in no rush to withdraw stimulus measures.

The ECB said on Nov. 12 that professional forecasters project European inflation will average 0.3 percent this year and 1.2 percent in 2010. The Frankfurt-based central bank, which aims to keep annual gains in consumer prices just below 2 percent, will release its latest forecasts for economic developments and inflation on Dec. 3.

European households anticipate prices will decline further in coming months. A gauge of consumers’ price expectations over the next 12 months rose to minus 11 in November from minus 14 in the previous month, the European Commission said on Nov. 27.

The statistics office will release a breakdown of November inflation data on Dec. 16.

Euro Area Consumer Prices Rise, Bloomberg, Eurostat
11/30/2009 9:51:01 AM