Eurozone: Inflation inches up to nine-month high in January
February 21, 2020
Complete data revealed harmonized inflation ticked up to 1.4% in January from December’s 1.3%, matching the preliminary estimate and marking a nine-month high. Despite the climb, the result is still below the European Central Bank’s target rate of near, but under, 2.0%. January’s pick-up was due to a notable acceleration in energy prices as well as faster price increases for food, alcohol and tobacco, while the increase in prices for services moderated.
On a monthly basis, harmonized consumer prices dropped 1.0% in January, contrasting December’s 0.3% rise. Core inflation, which excludes volatile energy and unprocessed foods prices, inched down to 1.3% from 1.4% in December.
Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:
“A reading just over 1% seems to be in line with the current economic situation, which means that any excitement among hawks at the higher core rate of the past two months has been premature. The ECB is on autopilot for the moment and these inflation numbers confirm that quite clearly.”
Author: Javier Colato, Economist