Eurozone inflation edges up to 2.2 pct in November: Eurostat

BRUSSELS - Annual inflation in the eurozone is expected to reach 2.2 percent in November, up from 2.1 percent in October, according to a flash estimate released on Tuesday by Eurostat, the statistical office of the European Union.

Services are projected to record the highest annual rate in November at 3.5 percent, slightly higher than 3.4 percent in October. Food, alcohol and tobacco are estimated to rise 2.5 percent year-on-year, unchanged from the previous month, Eurostat data showed.

Non-energy industrial goods are expected to see an annual inflation rate of 0.6 percent in November, the same as in October, while energy prices are forecast to fall 0.5 percent year-on-year, compared with a 0.9-percent decline in the previous month. Core inflation, which excludes energy, food, alcohol and tobacco, is estimated at 2.4 percent, unchanged from October.

Among the bloc's largest economies, Germany's annual inflation rate is expected to rise to 2.6 percent in November from 2.3 percent in October. In Spain, inflation is seen at 3.1 percent, slightly below October's 3.2 percent but still among the highest rates in the euro area. France's inflation is estimated to remain at a subdued 0.8 percent, unchanged from the previous month, while Italy's rate is forecast to edge down to 1.1 percent from 1.3 percent in October, Eurostat data showed.

Estonia is expected to post the highest annual inflation rate in November at 4.7 percent, while Cyprus is forecast to record the lowest rate at 0.2 percent.

The European Central Bank (ECB) in October kept its key interest rates unchanged, saying eurozone inflation remains broadly under control. "Most measures of longer-term inflation expectations continue to stand at around 2 percent, supporting the stabilization of inflation around our target," said the ECB.

ING Chief Economist Bert Colijn said markets hadn't been pricing a rate cut, and the latest data provides little reason to change that view.

"We expect that inflation can fall below target in the months ahead, but for the medium term, there seems to be enough inflationary drivers around for the ECB not to tilt too dovish," he added.