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A man rides a bicycle on a snow-covered street after a snowfall in Frankfurt am Main, western Germany, on December 29, 2024.
Kirill Kudryavtsev Afp | Getty Images
Annual inflation in the euro zone increased for the third month in a row and reached 2.4% in December, the statistical agency Eurostat reported on Tuesday.
The readings were in line with forecasts of economists polled by Reuters and marked an increase from a revised 2.2% in print in November. Core inflation held at 2.7% for the fourth straight month, also in line with economists’ expectations, while services inflation rose to 4% from 3.9%.
Headline inflation was widely expected to pick up after hitting a low of 1.7% in September as the base effect of lower energy prices fades. The European Central Bank will keep a close eye on the total increase in readings — along with the duration of the services sector and core inflation — as markets now expect interest rates to be cut from 3% to 2% at several times this year.
The rate of price growth in the largest economy of the euro zone, Germany, achieved a better-than-expected 2.9% in December, according to data released separately this week. Meanwhile, inflation in France last month was 1.8%, below a Reuters poll of analysts that had forecast 1.9%.
Haig Bathgate, director of Callanish Capital, told CNBC’s “Squawk Box Europe” that ECB policymakers won’t be too concerned about higher monthly inflation figures as long as they are broadly in line with expectations.
“There’s a lot more predictability now in a lot of the data series that we’re seeing … the direction of rates moving (down) in Europe is much more predictable than, say, the UK,” Bathgate said on Tuesday.
This is breaking news that will be updated soon.
