Kapital Macro: German and Spanish inflation data provide room for the European Central Bank to accelerate interest rate cuts

According to a report from Golden Finance, Andrew Kenningham, an economist at Capital Economics, said that inflation data from Germany and Spain suggests that the European Central Bank may accelerate its rate cut in December. In November, Germany’s inflation remained at 2.4%, while Spain’s inflation rose from 1.8% in October to 2.4%. Kenningham said that the data so far suggests that Capital Economics’ expectation of the Eurozone inflation rate rising from 2.0% in October to 2.2% in November is too high. He added that the rising risk of inflation and the increasing risk of long-term economic stagnation provide a strong reason for the European Central Bank to accelerate its rate cut in December, raising the expected rate cut from 25 basis points to 50 basis points.