The inflation plaguing European shoppers has fallen faster than expected
The inflation plaguing European shoppers has fallen faster than expected. The economy is in the dumps. That has people talking about interest rate cuts by the European Central Bank, perhaps as soon as the first few months of next year.
No rate move is expected at the bank’s policy meeting Thursday, and analysts say ECB President Christine Lagarde is highly unlikely to confirm any plans to cut. She may even warn that it’s too early to declare victory over inflation despite how it’s improved.
Like the ECB, the U.S. Federal Reserve and other central banks are running into market expectations that they will trim rates to support flagging economic growth now that price spikes have eased. But central bankers just finished drastic rate rises and want to ensure inflation is firmly contained.
Inflation in the 20 countries that use the euro currency surprisingly fell to 2.4% in November. That is not too far from the ECB’s goal of 2% considered best for the economy and a far cry from the peak of 10.6% in October 2022.
But wages are still catching up with inflation, leaving consumers feeling less than euphoric even as European city centers deck themselves in Christmas lights.
In Paris, travel agent Amel Zemani says Christmas shopping will have to wait for the post-holiday sales.
