FRANKFURT, Germany – In November, annual inflation in the euro zone climbed to 2.3%, surpassing the European Central Bank’s 2% target, according to the statistics agency Eurostat. This increase from 2% in October was in line with economists’ expectations, marking a rise for the second consecutive month after dropping to 1.7% in September. The higher figures were anticipated due to the diminishing deflationary impact of energy prices.

Core inflation, excluding volatile energy, food, alcohol, and tobacco prices, remained steady at 2.7% for the third consecutive month in November. This was primarily due to the resilience of services inflation, only slightly decreasing to 3.9% from the previous month’s 4%.

The European Central Bank is anticipated to implement a 25-basis-point interest rate cut in December, which would be the fourth decrease this year. Speculation about a larger 50-basis-point cut has subsided following some improvements in the region’s growth outlook and a rebound in inflation. The central bank’s decision will be influenced by the latest macroeconomic projections and potential global implications, particularly with recent political developments like the election of Donald Trump as the U.S. President.

Despite the inflation numbers and favorable economic indicators, some experts believe a 50-basis-point cut is unlikely. Melanie Debono, senior Europe economist at Pantheon Macroeconomics, pointed to record low unemployment and higher wage growth as factors that may prevent a larger rate cut. However, the final decision remains uncertain, with more dovish members of the ECB advocating for a 50-basis-point reduction. If the central bank opts for a 25-basis-point cut, it may continue with similar reductions at its upcoming meetings in January and March.