FRANKFURT (Reuters) — Euro zone inflation tumbled far more than expected this month, a challenge to the European Central Bank’s narrative that price growth remains stubborn and likely fuelling bets on early spring rate cuts in defiance of the bank’s explicit guidance.
Consumer price growth in the 20 nations sharing the euro currency dropped to 2.4% in November from 2.9% in October, well below expectations for 2.7%, as nearly all items — with the notable exception of unprocessed food prices — were a drag.
Even underlying price pressures eased more quickly than forecast, with inflation excluding food and energy, closely scrutinized by the ECB, dipping to 3.6% from 4.2% on a big drop in services prices.
The rapid…
