BRUSSELS (Reuters) - Euro zone inflation picked up in November because of a rise in electricity and accommodation prices, data showed on Tuesday, but wage growth continued to decelerate in the third quarter to the slowest pace in three years.
Consumer prices in 17 countries sharing the euro fell 0.1 percent on the month, increasing the annual inflation rate to 0.9 percent from 0.7 percent in October, a drop which forced the ECB to cut rates to a new record low in November.
The inflation rate dropped below 1 percent for the first time since February 2010 in October.
The monthly drop was led by a 0.8 percent decrease in prices of energy and a 0.1 percent fall in prices of tobacco and services. Food prices were flat in November, data from EU’s statistics office Eurostat showed on Tuesday.
Labor costs in the euro zone rose at their slowest pace in three years in the three months to September, Eurostat separately said, in a sign the cost competitiveness of euro zone euro zone countries was improving.
Nominal hourly labor costs in the bloc grew 1.0 percent in the third quarter, following a 1.1 percent increase in the second quarter.
Ireland, which has just exited its international bailout, saw wages fall 1.4 percent. In Portugal, still under a bailout reform program, wages fell 0.2 percent and salaries in Cyprus decreased by 7.7 percent.
ECB President Mario Draghi said on Monday the bank was ready to intervene if inflation remained low for too long, but gave no details what instruments it could use to counter any prolonged weakness in prices.
Low inflation shows that households are not spending and companies are not investing, dampening the pace of a recovery that nearly stalled in the third quarter.
Reporting by Martin Santa