FOOD price increases helped push inflation across the 19-country eurozone to its highest rate in two and a half years, official figures showed.

    However, the rise in the annual rate to 0.6 percent is unlikely to alter expectations that the European Central Bank will extend its stimulus program this week.

    The rise in the November rate as reported by Eurostat, the European Union’s statistics agency, was somewhat of a surprise in markets following lower than anticipated German figures. Most economists had penciled in an unchanged rate of 0.5 percent.

    Inflation in the eurozone is now at its highest since April 2014, when inflation stood at 0.7 percent.

    Eurostat said food, alcohol and tobacco had the biggest impact in pushing up prices in November. The main driver last year in the modest pick-up in inflation from April’s minus 0.2 percent has been the fading impact of 2015’s sharp fall in oil prices.

    Like all major economies, the eurozone has seen subdued inflation over the past couple of years largely because of the sharp fall in oil prices.

    Though inflation is pushing higher, it is still well below the European Central Bank’s target of just under 2 percent, a level it considers right for a healthy economy. The core inflation rate, which strips out the volatile items of food, energy, alcohol and tobacco, remains historically low at an annual rate of 0.8 percent.

    As a result, the ECB is expected this week to extend its bond-buying stimulus program further in hopes of getting inflation up toward target.

    The central bank is to discuss whether to extend its 1.77 trillion euros (US$1.9 trillion) in bond purchases, a stimulus program that pumps 80 billion euros per month into the eurozone economy. (SD-Agencies)