The eurozone's annual rate of inflation rose to its highest level since early 2014 during November, but remained far short of the European Central Bank's target as policy makers prepare for a Dec. 8 meeting at which they will decide whether to extend a bond buying program due to expire in March.

The European Union's statistics agency Wednesday said consumer prices in the eurozone were 0.6% higher in November than a year earlier, a pickup in the annual rate of inflation from 0.5% in October and its highest level since April 2014.

However, it remained well below the ECB's target of just under 2%, and with economic growth set to remain modest, economists expect policy makers to announce an extension of the bond buying program when they next meet.

But in an interview published Wednesday, ECB President Mario Draghi said policy makers could decide to change the size of their monthly bond purchases.

"We can deliver the appropriate [policy] stance by different combinations of instruments, for instance the amount of monthly [bond] purchases or the length of time over which they take place," Mr. Draghi said in an interview published on the ECB's website.

Consumer prices have risen more slowly than the ECB desires for almost four years, and were falling as recently as May despite a series of stimulus packages launched since June 2014 that have included a negative rate on deposits, a bond buying program that focuses on government issues but has been extended to corporate securities, and cheap loans for the currency area's banks.

At present, the central bank buys ?80 billion ($85.21 billion) a month of mainly government bonds under its quantitative easing program.

While the pickup in inflation suggests steady if slow progress toward the target, that is largely due to a stabilization in energy prices that are set in world markets, and only distantly affected by ECB policy.

The core rate of inflation?which excludes prices of energy, food and tobacco?tells a different story. It has been stuck at 0.8% for four straight months, and at the same level as in June 2014.

As long as energy prices don't fall, the overall rate of inflation is expected to pick up further over coming months, and may even near the ECB's target by March 2017, when the program of bond purchases is scheduled to end.

But without a pickup in other prices, the annual rate of inflation is likely to fall again further into 2017. Over recent weeks, ECB policy makers have stressed that the rise in inflation must show signs of being sustained before they can begin to wind down their various stimulus programs. The ECB's own economists forecast inflation will be 1.6% in 2018, whilethe European Commission has even lower expectations, seeing prices rising by just 1.4% in that year.

Write to Paul Hannon at paul.hannon@wsj.com

(END) Dow Jones Newswires

November 30, 2016 05:25 ET (10:25 GMT)

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