Eurozone inflation falls to eight-month low led by slower rise in energy prices
Eurozone annual inflation fell to its lowest level in eight months in December, led by a slower rise in energy prices.
The single currency bloc’s Consumer Price Index (CPI) met market forecasts as it dropped to 1.6 per cent from 1.9 per cent in November, the EU’s statistical office Eurostat said today.
But the month-on-month CPI remained flat, against expectations it would fall 0.2 per cent.
The inflation rate in the EU fell to 1.7 per cent from two per cent the previous month.
The lowest annual inflation rates came from Greece and Portugal – 0.6 per cent – while Estonia had the highest with 3.3 per cent, followed by Romania at three per cent.
“Eurozone CPI was unexpectedly steady… this could make the European Central Bank’s monetary stance more hawkish and convince Frankfurt to hike rates in the summer, in a ‘now or never’ decision,” BP Prime analyst Emanuele Canegrati said.
The core inflation rate, which excludes volatiles prices of energy, food, tobacco and alcohol, remained at one per cent.
“The core measure remained at 1%, confirming that the central bank failed to lift the underlying level of inflation during 2018, spearheaded by cooling global growth and ongoing trade wars that will be weighing on Draghi & Co before they can commit to any monetary policy normalisation,” Foenix Partners trader Nick Kilbey said.