Euro Annual Inflation Rises to 0.2 in Euro Area

Euro area inflation was 0.2% for November according to Eurostat figures, a rise from the 0.1%  for October. Despite the rise this was down by 0.1% a year on year.

The highest prices increases were found from vegetables, and restaurants and cafes, as they rose by 0.10%, followed by fruit which jumped up by 0.8%.

Transport prices were reduced the most by 0.54%, and as energy prices continued to decline, heating oils and gas prices fell by 0.21% and 0.10% respectively.

In the European Union EU) , inflation rose by the same amount, up to 0.1% from the 0% figure recorded for October. This time last year inflation in all of the EU member states was 0.3%.

In total, 12 EU members suffered negative inflation, the lowest rates were found in Cyprus by-1.5%,  while Bulgaria, Romania and Slovenia all saw prices fall by -0.9%.

Belgium saw the highest rise in inflation, increasing  by 1.4%. They were followed by Malta  on 1.3%, and Sweden who saw an inflation growth of 0.8%.

Euro Falls to US Dollar as Rate Decision Looms

The euro has fallen against the US dollar, as the anticipation of the expected interest rate rise in the United States grows, with the Federal Reserve to make an announcement after their meeting today.

Since yesterday morning GMT, the euro has decreased in value in comparison to the greenback, plunging from buying $1.106, to just above  $1.09 as the afternoon progressed.

This morning the euro will now buy $1.093, but the euro is certain to suffer considerable losses to the dollar, in the event of a rate rise.

US Inflation Data Ensures Rate Rise More Likely

The latest figures released by the US Department of Labor have revealed that the consumer index prices were unchanged for November, but the all items index has risen over the past year.

The increase in the all items index of 0.5% in prices, is the largest annual surge in prices, since the same statistic up to the end of 2014.

After omitting food and energy, the all items index rose by 0.2% for November, matching the same increases in October and September.

The indexes for shelter, medical care, airline fares, new vehicles, and tobacco, all hiked for last month.

In contrast, the indexes for recreation, apparel, household furnishings and operations, and used cars and trucks, all declined for November.

Over the past year, food prices have risen by 1.3%, but energy has proven a huge drag on prices overall, as they have decreased by a significant 14.7%.

As inflation has escalated over the year, the argument for an interest rate rise has grown.

Many analysts now believe its time for a  normalisation of monetary policy, in relation to the action taken after the 2008 financial crash.

Euro Continues Its Rise Against the UK Pound

In contrast to its relationship with the US dollar, the euro has continued its rise against the UK pound. Which it has enjoyed since the announcements by the European Central Bank Governing Council, in their policy meeting in the first week of December.

The euro is currently buying £0.727, nearly reaching the peak level over the past 24 hours GMT of £0.73.