Eurozone producer price inflation eased as expected in December, lifting the scope for an interest rate cut from the European Central Bank, the latest figures from Eurostat showed Thursday.
Producer price inflation fell to 4.3 percent from 5.4 percent in the preceding month. The annual rate slowed as expected driven by widespread declines in sub-components of the producer price index, except capital goods.
Core producer price inflation that excludes construction and energy, came in at 2.6 percent year-on-year compared to 3 percent in November.
Prices in the intermediate goods industry grew 2.8 percent year-on-year, slower than the 3.5 percent a month ago. Energy price inflation dipped to 9.5 percent from 12.4 percent. Pipeline inflation in the durable and non-durable consumer goods manufacturing slowed to 2.3 percent and 3.2 percent, respectively.
Meanwhile, the pace of increase in capital goods producer prices rose to 1.5 percent from 1.4 percent in November.
On a monthly basis, the producer price index for the total industry, excluding construction fell 0.2 percent, offsetting the 0.2 percent rise in the previous month. Economists had expected only a 0.1 percent fall.
The industrial producer price index for 2011 increased 5.9 percent from 2010.
Data released Wednesday showed that consumer price inflation held steady at 2.7 percent in January. Although inflation slowed from a three-year high seen in November, it has remained above the central bank's target of 'below, but close to 2 percent' since December 2010.
The European Central Bank left its interest rate unchanged at 1 percent in January, after lowering it in the previous two months to spur growth.
IHS Global Insight's European Economist Howard Archer said the weakened manufacturing activity is leading companies to become much more circumspect in their pricing policy to try and gain, or even retain business. Moreover, recent software input prices eased the pressure on manufacturers to raise prices to protect their margins, he added.
In the EU27, producer prices dipped 0.2 percent in December from a month ago. Likewise, producer price inflation eased notably to 4.9 percent from 6.4 percent in November.
For comments and feedback contact: editorial@rttnews.com
Business News
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.