Annual euro zone inflation accelerated last month more than initially estimated, data from the European Union statistics office showed today. Industrial production in October also missed market expectations.
Eurostat said consumer prices in the euro zone rose 1.9% year-on-year in November, revising upwards its earlier flash estimate of 1.8%, which was also the market consensus.
The figure was up from 1.6% in October - a 32-month low. Month-on-month prices stayed unchanged, as expected.
The European Central Bank wants to keep annual price gains just below 2% and has raised interest rates six times since December 2005 to stem inflationary pressures from fast credit growth as the euro zone economy expands.
Economists expect the ECB to raise rates again in early 2007 since the economy is expected to slow only slightly next year from this year's forecast growth rate of around 2.6%. Also, there might be upward pressure on prices from wage negotiations and a value-added tax rise in Germany.
Meanwhile, industrial production data for October showed a 0.1% monthly decline against market expectations of a 0.4% gain, mainly as a result of falls in the output of energy and capital goods.
On year-on-year terms, the production increase was also smaller than expected at 3.6%, rather than the consensus estimate of 4.4%.
The annual inflation rise was fuelled by a 2.1% gain in energy, as a fall in energy prices in November 2005 lowered the base for the year-on-year comparison for last month. On a monthly basis energy prices fell 0.5% in November.
Food, alcohol and tobacco prices rose 3% year-on-year.
Excluding the volatile energy and unprocessed food costs, a measure the ECB calls core inflation, prices were flat month-on-month and rose 1.6% year-on-year, as expected.
This was unchanged from October - a sign that past energy price rises have not yet filtered through to other sectors of the economy in any major way. The ECB is keen to prevent such second-round effects with tighter monetary policy.
