(Bloomberg) -- Inflation in the European Union has peaked and is headed for a slow decrease, according to Economy Commissioner Paolo Gentiloni.  

“I think inflation has reached its peak at the end of last year,” Gentiloni told French TV BFM Business on Friday. “It will fall gradually, not suddenly.”

With slower energy and services inflation, consumer prices in France rose 6.7% from a year earlier after record increases of 7.1% in October and November. Inflation in Germany also slowed more than anticipated last month. 

The signs that inflation may have peaked are a relief for European Central Bank policy makers. The Frankfurt-based institution already opted for a smaller half-point rate hike at its last meeting after data showed inflation slowed in November. A warmer-than-expected start to winter could also temper some of the cost pressure as demand for energy proves softer than anticipated.

Gentiloni also said he is optimistic the EU can limit the impact of the energy crisis. “The situation is much less bad than what we expected in the summer, we expected blackouts, we expected stagflation, we expected a long recession,” he said, predicting instead “a lighter and very brief contraction.” 

The EU commissioner also said the bloc’s executive arm will present next Wednesday its proposed response to the Inflation Reduction Act, a US law which includes new spending and tax breaks over a decade to benefit US companies. 

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