Inflation in the Euro zone reaches 2.3% in November, in line with forecasts.

• In November, Eurostat reported that the annual inflation rate in the euro zone increased to 2.3%.
• The increase in price above the European Central Bank's 2% target was anticipated and mainly due to the energy market's effects.

In November, Eurostat reported that the annual euro zone inflation increased to 2.3%, surpassing the European Central Bank's 2% target.

Reuters polled economists who predicted the 2.3% annual rate for the month, an increase from the 2% rate in October.

The price rise in the bloc has increased for two consecutive months, despite a decrease to 1.7% in September, due to the diminishing deflationary impact of energy prices.

In November, core inflation, which excludes volatile energy, food, alcohol, and tobacco prices, remained steady at 2.7% for the third consecutive month.

The stickiness of services inflation is supporting the core rate, which only slightly decreased from 4% to 3.9% in November compared to the previous month.

The ECB's 25-basis-point interest rate cut in December was fully priced by markets, marking the fourth trim of the year.

The possibility of a larger 50-basis-point cut by the central bank has decreased since the last month due to slight improvements in the euro area growth outlook and a rebound in inflation.

While ECB policymakers, including executive board member Isabel Schnabel, have emphasized the importance of caution in monetary easing, inflation in October was slightly higher than anticipated.

The ECB's upcoming Dec. 12 meeting will be heavily influenced by its latest staff macroeconomic projections, as well as the potential global impact of the recent election of Donald Trump as U.S. president. The central bank will assess whether Trump will follow through on his threats of universal trade tariffs and how such a step would affect European Union exports.

The value of the against the U.S. dollar and British pound remained relatively stable after the release of the data.

According to Kyle Chapman, FX market analyst at Ballinger Group, the increase in headline inflation is due solely to year-on-year fluctuations in energy prices, and the ECB will view a 0.9 percentage point decrease in month-on-month services inflation positively.

Despite the soft growth outlook, it is certain that inflation will decline to 2% in a sustainable manner next year, according to Chapman. He also stated that the market has settled on a 25-basis-point move in December.

"There is no need to start frontloading cuts because the economy is not falling off a cliff and there is uncertainty about the neutral rate," he stated.

Pantheon Macroeconomics' senior Europe economist, Melanie Debono, stated that the inflation figures, along with recent data indicating record low unemployment and higher negotiated wage growth in the third quarter, will prevent a 50-basis-point interest rate cut.

Despite the efforts of the more dovish members of the ECB to push for a 50-basis-point trim, the final monetary policy decision will still be a "close call," Debono said. If the central bank decides to stick with a 25-basis-point move, it is likely to follow this step with cuts of the same size at both of its following meetings in January and March, she added.