Shoppers pass through Alexanderplatz during Black Friday sales in Berlin, Germany, on Nov. 28.
(Bloomberg) — A euro-zone inflation reading that’s likely to stay close to 2% should be enough to satisfy officials that they can avoid tweaking interest rates in December.
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Consumer prices probably rose 2.1% in November from a year earlier, according to the median of 29 forecasts in a Bloomberg survey ahead of Tuesday’s release. The underlying measure, which strips out volatile elements such as energy, is seen remaining at 2.4%.
Such readings for the final inflation numbers before the European Central Bank’s Dec. 18 decision might harden the resolve of policymakers to keep borrowing costs unchanged. That would leave them able to focus instead on their pivotal quarterly forecasts, featuring the first outlook stretching as far as 2028.
Officials find themselves in a holding pattern at present, with no clear consensus on what the next move for rates should be. Mixed signals from national reports on Friday might feed that sense of ambiguity, after stronger-than-expected inflation in Germany and Spain was balanced by weaker-than-anticipated numbers for France and Italy.
If there’s any bias within the Governing Council at present, it might be toward scouring the data for upward pressure on price growth. Vice President Luis de Guindos told Bloomberg Television on Nov. 26 that “the risk of undershooting is limited, in my view.” President Christine Lagarde, who’s repeatedly highlighted the good position that policy is currently at, may offer her own perspective in testimony to lawmakers in Brussels on Wednesday.
The unresolved sense of direction from the ECB is being mirrored by conflicting views from economists. Bloomberg Economics, for example, predicts inflation will slow in future months, adding to the case for rate cuts.
What Bloomberg Economics Says:
“Euro-area inflation will likely remain steady in November at just above the central bank’s 2% target, before resuming a sustained deceleration in December. That may add pressure on the ECB to ease policy next year, even though the Governing Council is currently resisting such a move.”
—Simona Delle Chiaie and David Powell. For full analysis, click here
BNP Paribas, in a recent note, offered a different take. “As we move into 2026, we expect the ECB to see stronger growth and inflation than it currently expects, which should further strengthen the case for a prolonged rate hold,” wrote Paul Hollingsworth, the bank’s head of developed markets economics. “We continue to see the next move as a hike.”