Eurostat, the European Union statistics agency, said Wednesday that the consumer price index for the 19 euro currency-using countries climbed to 10% in November from a previous year.
It was 10.6% less than October. This is the first decline since June 2021.
This figure was based on the faster rise in prices for tobacco, alcohol, and food. However, energy prices rose at a 34.9 percent rate, compared to an alarming 41.5% increase in October.
High energy prices and out-of control inflation are driving the feed of uncontrolled inflation . These high energy prices were caused by Russia’s largely cut off natural gas supplies during the war with Ukraine and by bottlenecks and rebounding in demand after the COVID-19 restrictions ended.
Rising prices have affected economies all over the globe, but Europe is particularly hard hit by their dependence on Russian natural gases, which Gazprom has reduced to an absolute trickle.
European leaders believe it is energy warfare because they support Ukraine.
However, natural gas prices fell from their all-time highs this year as Europe has largely filled its winter storage with supplies. Additionally, milder weather has decreased fears of a shortage in the heating season.
The November inflation number supports the prediction that the European Central Bank will slow their rapid rise in interest rate.
The bank is expected to go with a half-percentage-point boost at its Dec. 15 meeting, instead of another rise of three-quarters of a point made at its last two meetings, according to economists at Oxford Economics.
They stated that inflation should “remain elevated” and that easing energy prices will “very likely be followed [by a gradual decline in inflation for eurozone] by today’s data.” Christine Lagarde, President ECB, stated Monday that she believes inflation has not peaked after reaching new record levels. She also said that the bank will continue to raise interest rates to address those price spikes.
The bank targets inflation of 2%.
According to her, European lawmakers do not understand the factors that are driving inflation. “Whether it is food and other commodities or energy, we don’t see the components or direction that would lead us to believe that we have attained peak inflation and that it will decline quickly.”
Lagarde explained that the central bank will continue to “tame inflation with all the tools they have”, principally interest rate increases.