Eurozone producer prices eased as expected month-on-month in November, but the pace of decline decelerated for the third month in a row as the downward pull from cheap energy lessened, European Union statistics office data showed.

Eurostat said prices at factory gates in the 19 countries sharing the single currency fell by 0.2 per cent in November from October for a 3.2 per cent year-on-year decline.

Economists polled by Reuters had expected a 0.2 per cent monthly fall and a 3.1 per cent annual drop.

In October, the monthly producer price fall was 0.3 per cent, in September 0.4 per cent and in August 0.8 per cent, driven by energy price declines of 0.5, 0.9 and 2.7 per cent respectively.

In November, energy prices were down by 0.3%

In November, energy prices were down by 0.3 per cent.

Without energy costs, the monthly producer price index has been unchanged at -0.2 per cent in August, September, October and November, while the year-on-year reading was -0.7 per cent in November and October, -0.6 per cent in September and -0.5 per cent in August.

Producer prices eventually translate into consumer inflation because they are passed on to consumers unless wholesalers and retailers absorb the changes in prices at factory gates by adjusting their own profit margins.

The European Central Bank wants to keep consumer inflation below but close to two per cent over the medium term and is buying government bonds on the market to inject more money into the economy to accelerate price growth. Inflation in December was only 0.2 per cent.