Inflation in Germany and Spain fell in November, prompting a rally in eurozone government bonds as investors bet that price growth in the bloc had peaked and the European Central Bank would shift to smaller interest rate rises.

A slowdown in energy and services prices helped inflation in Germany to fall in line with expectations to 11.3 per cent in the year to November, down from a 71-year peak of 11.6 per cent in October, according to data from the country’s federal statistical agency on Tuesday.

Annual inflation in Spain fell more than expected, from 7.5 per cent in October to 6.6 per cent in November, because of lower fuel and electricity prices, its national statistics agency said on Tuesday. Inflation dropped from 12.3 per cent to 10.6 per cent in Belgium.