Inflation in the Euro zone slowed down more than expected in November according to the European Union’s statistics agency.
Economists said that was because the impact of high oil prices has faded.
The cost of petrol, heating oil and package holidays fell more than any other category.
Eurostat found that the amounts people paid for clothes and rent went up most from October to November.
Inflation in the 12 countries that use the euro rose by an annual rate of 2.3%, down from 2.5% in October.
Core inflation, that is excluding volative food and fuel prices, increased by 1.5%.
At the same time, it was revealed that optimism among German businesses reached its highest level in nearly five and a half years this month.
The Munich-based Ifo institute said its business climate indicator, which is based on a monthly survey of around 7,000 firms, rose.
Retailers and wholesalers reported a “significant improvement” in current business.
It is the latest indication that Europe’s largest economy is recovering faster than expected.
Analysts said the strength of the German survey reinforces expectations that the European Central Bank will raise the cost of borrowing in the euro zone on a gradual basis over the coming months.