Euro Area: Inflation resurfaces in January
Harmonized inflation came in at 0.9% in January, swinging from December’s 0.3% year-on-year drop in prices and marking the strongest reading in close to one year. Inflation nonetheless remained below the European Central Bank’s target rate of near, but under, 2.0%. January’s jump was due a softer fall in prices for energy, a turnaround in prices for non-energy industrial goods, and faster increases in prices for services and for food, alcohol and tobacco.
On a monthly basis, harmonized prices rose 0.16% in January, following December’s 0.33% increase. Core inflation, which excludes volatile energy and unprocessed foods prices, soared to 1.4% from 0.4% in December.