On the downside, concerns remain relating to a stronger or more protracted than expected negative feedback loop between the real economy and the financial sector, renewed increases in oil and other commodity prices, the intensification of protectionist pressures and the possibility of disruptive market movements related to the correction of global imbalances.
With regard to price developments, as expected, euro area annual HICP inflation has turned positive again after five months of negative rates. According to Eurostat’s flash estimate, it stood at +0.6% in November, up from –0.1% in October. The rise mainly reflects upward base effects stemming from the drop in global commodity prices a year ago.