The data is likely to reveal that the inflation rate in the Eurozone is stable near the 2% level, which may be enough to convince monetary policymakers to avoid adjusting interest rates in December.
Consumer prices are expected to rise 2.1% in November compared to the previous year, according to the median forecast of 29 people surveyed by Bloomberg. The core index, which excludes volatile items such as energy and is due to be released on Tuesday, is expected to remain at 2.4%.
Data that supports maintaining interest rates
This data, the last before the European Central Bank’s anticipated decision on December 18, may reinforce policymakers’ conviction to keep borrowing costs unchanged, allowing them to focus instead on their pivotal quarterly forecasts, which will include the first outlook extending to 2028.
A sense of anticipation prevails among monetary policymakers, with no clear consensus on the next move regarding interest rates. Mixed signals from national reports on Friday may add to this uncertainty, as stronger-than-expected inflation in Germany and Spain was offset by weaker-than-expected readings in France and Italy.
If there is any bias within the current governing council, it may be toward scrutinizing the data for upward pressure on price growth. Vice President Luis de Guindos told Bloomberg Television on November 26 that the risk of inflation falling below the target is limited, in his view. President Christine Lagarde, who has repeatedly emphasized the current favorable monetary policy stance, will offer her own perspective in her testimony before lawmakers in Brussels on Wednesday.
The European Central Bank's lack of direction also reflects the divergent views among economists. For example, Bloomberg Economics predicts that inflation will slow in the coming months, strengthening the case for an interest rate cut.
Bloomberg Economics experts' opinion:
Eurozone inflation is likely to remain stable in November at slightly above the central bank's 2% target before resuming a sustained slowdown in December. This could add pressure on the European Central Bank to ease monetary policy next year, even though the Governing Council is currently resisting such a move.
Analysts Simona Dele-Kay and David Powell
BNP Paribas offered a different interpretation in a recent note. Paul Hollingsworth, head of developed markets economics at the bank, wrote: “As we head towards 2026, we expect the European Central Bank to see stronger growth and higher inflation than it currently forecasts, which will further strengthen the case for keeping interest rates at their current levels for an extended period.” He added: “We still believe the next step will be an interest rate hike.”
In other news, the OECD in Paris will release new forecasts on Tuesday, the US will release a consumer price index, UK monetary policymakers will give their assessment of the stability of the financial system, and Brazil may reach the end of its longest period of growth in decades.
