Capitol Macro: German, Spanish inflation data provide room for ECB to accelerate rate cuts

Inflation data from Germany and Spain mean the European Central Bank could accelerate the pace of rate cuts in December, said Andrew Kenningham, an economist at Capital Macro, in a report. German inflation held steady at 2.4 per cent in November, while Spanish inflation climbed to 2.4 per cent from 1.8 per cent in October.Kenningham said the data so far suggests that Capitol Macro's expectations that eurozone inflation would rise to 2.2 per cent in November, from 2.0 per cent in October, were too high. He added that given that the risk of inflation picking up again is diminishing and the risk of a prolonged period of stagnant growth is increasing, this provides a strong case for the ECB to accelerate the pace of interest rate cuts in December, raising its rate cut estimate to 50 basis points from 25 basis points.