Inflation in Germany eased more than expected in November, according to official data released on Friday.
ADVERTISEMENTPrices in Europe’s largest economy are increasing at the slowest rate seen since June 2021, mainly thanks to falling energy prices.
Compared to November of last year, prices are up 2.3%, but inflation is down 0.7% on a month-to-month basis.
The annual increase undercuts predictions, with analysts from Reuters previously forecasting a 2.6% jump.
The figures cited are the harmonised index of consumer prices (HICP), which are adjusted to allow comparisons between EU member states.
German Consumer Price Index data for November (CPI inflation), was 3.2% higher than the same month a year earlier and down 0.4% compared to October 2023.
“The rate of inflation has slowed for the fifth consecutive month”, said Ruth Brand, President of Germany’s Federal Statistical Office.
She added: “In October and November 2023, many energy products, in particular, cost less than they did a year earlier. [...] The year-on-year rate of increase in food prices has also continued to slow, but is still markedly higher than overall inflation.”
Easing inflation is raising hopes that the European Central Bank (ECB) will cut interest rates next year, which is causing the European stock market to rally.
When interest rates fall, share prices tend to rise, meaning that people will be hoping to buy stocks whilst they are still relatively cheap.
Europe's STOXX 600 index has gained nearly 11% so far this year, and Germany's DAX has risen nearly 20%.
More widely, the annual inflation rate in the eurozone was recorded at 2.4% in November, down from a 2.9% annual rise in October 2023.
The ECB's target sits at 2%.
