Inflation stabilizes at 2.1% in the Eurozone and will allow the ECB to maintain rates this Thursday

inflation remained at 2.1% in November in the Eurozone for the second consecutive month. The data published this Wednesday by Eurostat, the European statistics office, allays the worst fears about the economic impact of the tariff crisis or the war in Ukraine and gives room to the European Central Bank (ECB) to maintain reference interest rates at 2% at the meeting that the organization holds tomorrow in Frankfurt and which will be its last meeting of the year.

Services were once again the item that put the most upward pressure on prices last month, rising 3.5%, one tenth more than in October. They followed him food, alcohol and tobacco, which became more expensive by 2.4%one tenth less than the previous month. In the opposite direction, energy fell by 0.5%. Core inflation, which excludes energy prices and fresh food prices from its calculation, stood at 2.4% for the third month. This is the reference to which the ECB pays the most attention, as it shows whether price tensions are a temporary or more structural problem.

By country, the lowest annual CPI rates were recorded in Cyprus (0.1%), France (0.8%) and Italy (1.1%), while the highest were in Romania (8.6%), Estonia (4.7%) and Croatia (4.3%). Compared to October 2025, annual inflation decreased in twelve Member States, remained stable in five and increased in ten. In Spain, the harmonized inflation rate -the one taken by Eurostat to be able to make homogeneous comparisons between countries- was 3.2%.

Interest rates at 2% throughout 2026?

“The strength of growth, higher than expected, and the persistent inflation of services have closed the window for a preventive decline and have reinforced confidence in the current stance” of the ECB, maintains Josefina Rodríguez, an economist at Vanguard. Your reference projection is that he ECB will keep rates at 2% throughout 2026a level they consider neutral.

However, falling energy prices and the likelihood that inflation will remain below the medium-term target of 2% for much of next year mean that the risks lean more towards easing rather than tightening of monetary policy, that is, towards further rate cuts rather than possible increases.

Recent statements by ECB board member Isabel Schnabel have reinforced the view that a short-term rate cut is highly unlikely: “it seems quite comfortable with current market expectations, which point to no changes in the next 12 months, and even a low probability of a rate hike,” explains François Rimeu, senior strategist at Crédit Mutuel Asset Management.

From Pimco, the largest fixed income manager in the world, they agree that the fact that inflation remains close to the objective and that growth is resilient supports the decision to maintain inaction. This does not prevent there from being an intense debate in the entity’s governing council, where some members see upward risks in the medium term and others highlight how, for the next two years, these economic risks are rather downward. As explained by Pimco, this divides the entity’s highest governing body between those who declare “that the cycle of cuts has ended” and those who “are open to new cuts.”