Inflation in Germany declines, reinforcing calls for easing rate hikes

Following Spain and Belgium, Germany reported lower inflation rates. Thus, it provided an argument for a slowdown in the pace of interest rate hikes.

The consumer price level in Europe's largest economy rose 11.3% in November compared with the same period last year. The statistics office said Tuesday that consumer price growth had slowed from 11.6% in October. Analysts polled by Bloomberg had expected growth to be 11.3%.

The rate of inflation in Spain was slower than expected due to lower energy and fuel costs, although the core price index rose. At the same time, Belgium's core inflation rate fell to 10.6%.

Inflation data for 19 eurozone countries are due out Wednesday, and economists are also forecasting a slight slowdown — the first in a year and a half. The data will be crucial as ECB officials are now discussing two options for further action. The first is a third consecutive 75 basis point increase in borrowing costs, and the second is a smaller increase of half a point before a likely recession arrives.

Some officials have already argued for a more restrained increase in October. Their arguments could become even stronger if prices start to decline.