An important measure of euro zone inflation edged down last month, further raising the prospect of more monetary easing by the European Central Bank when its governing council meets on Thursday.

Core inflation, a measure that strips out price changes for more volatile items such as food and fuel, fell to 0.9 per cent in the year to November from 1.1 per cent the previous month, according to figures published by Eurostat, the European Commission's statistics bureau. Headline inflation remained at 0.1 per cent.

While the ECB targets headline inflation, its president Mario Draghi has said policymakers are now closely watching the core reading, which is viewed as a better measure of underlying demand and longer-term economic prospects.

The fall in core inflation underlines the fragility of the euro zone’s recovery, showing businesses are struggling to raise the cost of goods to customers.

The ECB president is set to present the case for pumping more monetary stimulus into the euro zone’s economy this morning, when policymakers and heads of euro zone central banks gather in Frankfurt for their final deliberations of 2015.

Meanwhile, the head of the US Federal Reserve said yesterday the US had "recovered substantially" from the Great Recession and is set for further growth and firmer inflation.

Janet Yellen, participating in an Economic Club of Washington discussion, was laying the ground for the first rise in official interest rates since 2006.

A lift in rates would testify to the progress the US had made in shrugging off the legacy of the crash, the Fed chairwoman said, adding there were risks in waiting too long to start normalising policy.

Dangers from abroad had also diminished since September, when the Fed held fire on rates citing risks from China and financial markets.

Alluding to the key test the Fed has set before raising rates, Ms Yellen said her confidence in the inflation outlook had been bolstered by recent strength in the jobs market, adding there had been welcome signs of a pick-up in wage growth.

The Federal Open Market Committee gathers in two weeks' time for a highly anticipated rate-setting meeting, with financial markets primed for a possible increase in official short-term interest rates from near-zero levels. – Copyright The Financial Times Limited 2015