Market analyst Sam Coventry said that due to data showing persistent inflation in eurozone countries such as Germany, the European Central Bank may have to cut interest rates by 25 basis points next month in the traditional way. The next decision of the European Central Bank will be held on December 12th.

The CPI inflation rate in Germany rose from 2.0% to 2.2% in November, and energy inflation increased from -5.5% to -3.7%, driving the annual rate higher. The core inflation rate in Germany has accelerated to 3.0%, while service sector inflation remains unchanged at 4.0%.

Members of the European Central Bank who believe that a gradual interest rate cut is still appropriate will point out that the levels of core inflation and service sector inflation have risen, and oppose any attempt to significantly cut interest rates by 50 basis points.

Salomon Fiedler, an economist at Berenberg Bank, said, "The European Central Bank is concerned about the second round impact of wage growth on inflation, so it is particularly closely monitoring service prices because labor costs account for a higher than average proportion of service industry costs

In recent weeks, as traders have increasingly seen the European Central Bank cutting interest rates more significantly and at a faster pace than the US and UK central banks, the euro has been struggling.

However, these inflation data will warn against these expectations. They reminded people in a timely manner that the European Central Bank has not yet fully determined to accelerate the pace of interest rate cuts, as this may further exacerbate inflation.

Fiedler said, "After the release of Germany's November inflation data, we see no reason to change the call for monetary policy rates in the eurozone. We still expect the European Central Bank to cut interest rates by 25 basis points each time in the next three meetings, thereby lowering deposit rates to 2.5% and then maintaining stability

In November, Spain's overall core inflation rate rose from 1.8% to 2.4%, but the core inflation rate slightly fell from 2.5% to 2.4%.

Spanish inflation is another closely watched data, as it is said that Spain's inflation transmission rate is faster, so it can set the tone for the entire eurozone.

These data were released before all eurozone data was released on Friday, and it is expected that the core inflation rate will rise from 2.7% to 2.8%, and overall core inflation will rise from 2.0% to 2.3%.

This will limit the rate cut of ECB in December to 25 basis points.

However, due to the economic slowdown and threats to growth, some members of the European Central Bank advocate for a significant 50 basis point interest rate cut.

Andrew Kenningham, Chief European Economist at Capital Economics, said, "We believe that considering the decreasing risk of another inflation outbreak and the increasing risk of long-term stagnation, the European Central Bank has sufficient reason to accelerate the pace of interest rate cuts to 50 basis points instead of 25 basis points in December

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