Inflation in Eurozone Slows as Energy Prices Ease, but Officials Remain Wary

Easing energy prices helped lower the annual rate of inflation in the eurozone in November, the first slowdown in a year and a half. But policymakers cautioned the worst may not yet be over.

Consumer prices in the 19 countries that use the euro as their currency rose at an annual rate of 10 percent in November, the European Commission reported on Wednesday. In October, the rate reached a record 10.6 percent. Twelve months ago, it was 4.9 percent.

After months of soaring from one high to the next, energy prices showed signs of slowing, as stocks of natural gas across the European Union remained unseasonably high and temperatures mild.

Although it remained the strongest driver behind eurozone inflation, the annual increase in the price of energy was 39.4 percent in November, down from a rate of 41.5 percent a month earlier. The price of food, however, climbed slightly, to 13.6 percent in the year through November.

Overall, the so-called core inflation rate, which excludes food and energy, remained steady at 5 percent.

In Europe’s largest economy, Germany, (11.3 percent, down from 11.6) and Spain (6.6 percent, down from 7.3), annual inflation rates cooled in November, thanks to easing energy prices. Consumer prices in France, the currency bloc’s second-largest economy, rose 7.1 percent from a year earlier, matching October’s increase. Baltic countries, which remain heavily dependent on natural gas, continued to have the bloc’s highest rates of inflation, topped by Latvia at 21.7 percent.

Such divergences among eurozone countries is a challenge for policymakers and is expected to lead to lively debates on how best to handle the situation. With inflation well above the 2 percent targeted by the European Central Bank, some policymakers are warning that it is too early for the bank to slow down.

The head of the E.C.B. warned this week that she did not believe that inflation had reached a summit, and made clear that the bank would continue to raise interest rates as part of its efforts to bring down prices. After months of caution, the E.C.B. increased interest rates by three-quarters of a point in both October and November.

“We do not see the components or the direction that would lead me to believe that we’ve reached peak inflation and that it’s going to decline in short order,” Christine Lagarde, the bank’s president, told the European Parliament on Monday. Echoing remarks made last month by the Federal Reserve chair, Jerome H. Powell, Ms. Lagarde then added that she believes inflation still has “a way to go.”

Analysts have been debating whether the E.C.B. will continue with the more aggressive approach of recent months, or ease back to an increase of only half a percentage point at its next meeting on Dec. 15.