Eurozone inflation plunges to 14-month low of 2.1 pc: EU data

BRUSSELS: Inflation in the 15 countries sharing the euro tumbled to a 14-month low of 2.1 percent in November, according to the EU's Eurostat data agency on Wednesday, confirming a first estimate.

The drop, from a rate of 3.2 percent in October, brought eurozone inflation to within a whisker of the European Central Bank's comfort zone, which it defines as annual consumer price growth of close to but less than 2.0 percent.

After hitting a record high of 4.0 percent in June and July, eurozone inflation has fallen sharply as oil and other commodity prices have collapsed in the face of a deep economic downturn.

The sharp drop in inflation has paved the way for interest rate cuts by the ECB, which most recently slashed its main rate last month by a record three quarters of a percentage point to 2.50 percent.

Excluding volatile items such as energy, food, alcohol and tobacco prices, inflation trends have been much more stable than the headline rate in recent months, according to Eurostat's data.

Core inflation, which strips those items out of the calculation, held steady in November for the fourth month running at 1.9 percent.