A man rides a bicycle on a snow-covered street after snowfall in Frankfurt am Main, western Germany, on December 29, 2024.
Kiril Kudryavcev | Afp | Getty Images
Annual inflation in the eurozone increased for the third month in a row and reached 2.4 percent in December, the statistical agency Eurostat announced on Tuesday.
The reading was in line with the forecast of economists polled by Reuters and marked an increase from the revised 2.2% printed in November. Core inflation remained at 2.7% for the fourth consecutive month, which also met economists’ expectations, while services inflation rose to 4% from 3.9%.
Headline inflation was widely expected to accelerate after hitting a low of 1.7% in September, as the base effects of lower energy prices fade. The European Central Bank will closely monitor the full extent of the increase in the reading — along with stability in services and core inflation — which markets currently expect to cut interest rates from 3% to 2% for several periods this year.
The rate of price growth in the eurozone’s largest economy, Germany, reached 2.9% more than expected in December, according to data released separately this week. Meanwhile, inflation in France last month was 1.8%, below a Reuters poll of analysts who had forecast 1.9%.
Haig Bathgate, director of Callanish Capital, told CNBC’s “Squawk Box Europe” that ECB policymakers won’t be overly concerned about the warmer monthly inflation reading, as long as it’s broadly in line with expectations.
“Now there’s a lot more predictability in a lot of the data series that we’re seeing … the direction of rates moving [lower] in Europe it’s much more predictable than, say, the UK,” Bathgate said on Tuesday.
This is the latest news and will be updated soon.
