Germany has followed Spain and Belgium in reporting slower inflation, offering ammunition to those who want the European Central Bank to ease the pace of interest rate increases.
Consumer prices in Europe's largest economy rose 11.3% in November compared with a year ago, down from October's annual 11.6% jump, the Federal Statistics Office of Germany said Tuesday, citing factors including energy costs for the deceleration. Analysts surveyed by Bloomberg expected an advance of 11.3%.
In Spain, inflation abated for a fourth month and by more than forecasted, driven by declines in electricity and fuel costs, although a gauge of underlying prices quickened. The annual inflation number in Belgium, meanwhile, slowed to 10.6%.
Inflation data for the 19-nation eurozone is due today, with economists also estimating a slight moderation -- the first in 1 1/2 years. The reading will be crucial as European Central Bank officials weigh a third straight three-quarter-point increase in borrowing costs or a smaller half-point move ahead of a likely recession.
Cooling inflation may prompt officials to put a greater emphasis on the core gauge, stripping out volatile energy and food costs, in determining whether a turning point has been reached. European Central Bank Vice President Luis de Guindos said Tuesday that the underlying measure is "the signal we have to keep following."
Natural gas costs will be key to determine the inflation path in Germany, which relied heavily on Russia as a supplier before its war in Ukraine. The government is now rushing to find other sources and preparing to subsidize soaring bills for companies and households.
Commerzbank economist Marco Wagner said it's too early to give Germany the all-clear after just one dip in price growth.
"Underlying inflation will remain high," Wagner said in a report to clients. "The collective-bargaining rounds have gained momentum and the unions are able to push through significantly higher wages than at the beginning of the year. In addition, companies have incurred high costs due to material and delivery bottlenecks."
Information for this article was contributed by Kristian Siedenburg and Harumi Ichikura of the Bloomberg News (WPNS).