The Eurozone's inflation rate has dropped to its lowest point in more than two years

European Central Bank (ECB) President Christine Lagarde at the start of Eurogroup Finance ministers meeting, Luxembourg, 16 October 2023.

The annual rate of inflation in the eurozone fell to its lowest level in more than 2 years in November, the EU's official statistics agency said, AFP reported.

Consumer price growth in the bloc of 20 countries with a single currency fell to 2.4%, Eurostat data showed, the lowest level since July 2021.

The number was higher than the average expert projection given by financial data company FactSet, which predicted that inflation would decrease from 2.9% in October to 2.7% in November.

The data will provide reassurance to the European Central Bank (ECB), which halted its unprecedented run of interest rate hikes, that they continue to tame red-hot inflation. But the data is likely to fuel hopes that the Frankfurt-based authority may consider a rate cut soon.

Inflation has been steadily declining since peaking at 10.6% in October 2022 following market turmoil caused by Russia's war on Ukraine.

However, inflation is still above the ECB's target of 2%.

Core inflation, which excludes volatile energy, food, alcohol and tobacco prices, also edged down to 3.6% in November from 4.2% in October.

At its last meeting in October, the ECB kept interest rates on hold, but its head, Christine Lagarde, warned that another energy shock could lead to another spike in inflation.

"There will be another rise in inflation probably at a higher number going forward and we should expect that," Lagarde said on November 10.

Food and drink price growth also eased, falling to 6.9% in November from 7.4% in October, according to Eurostat.

However, energy prices in the eurozone contracted further in November, falling 11.5% on the back of a decline of 11.2% the previous month.

Belgium was the only country where consumer prices fell in November - by 0.7%, according to Eurostat data.

There was also a glimmer of hope for Europe's biggest economy as inflation in Germany slowed further to 2.3% in November from 3.0% in October, the agency's data showed. /BGNES