Eurozone inflation pressures remain extremely subdued - Rabobank

Analysts at Rabobank note that yesterday, the final estimate for Eurozone inflation in November was confirmed at 1.5%, with core inflation at 0.9%.

Key Quotes

“Our super core measure, which excludes value-added taxes and government administered prices stood at 0.85% in November, where industrial ex-energy goods inflation accelerated slightly, but this being mostly offset by slightly lower service sector inflation. The only conclusion one could draw from recent numbers is that underlying inflation pressures remain extremely subdued, even more so than one would expect.”

“Next months’ HICP data may confirm whether or not that has been due to transitory factors. One thing to highlight, though, is that the package holidays component in the HICP returned to 3.9% YoY in November from a low reading of 1% in October. In other words, without this component, core inflation would have been 0.8%.”