Eurozone: inflation remains lofty

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Eurostat has just published its final version of January’s eurozone price index. On a rolling 12-month basis, headline inflation came in at 2.8%, down from 2.9% in December. The figure confirms the flash estimate published on 1 February. January’s core inflation, which excludes food and energy, came in at 3.3%.

The ECB has used these figures to update and seasonally adjust its monthly price-change data.

Following low figures from September to November, core inflation increased 0.25% in December and 0.30% in January. To achieve the ECB’s inflation target, they would need to come in significantly lower, at 0.17% on average.


The price of services is contributing significantly to these strong inflation figures. In January, services prices rose by 0.29% and 0.36% compared with a pre-Covid average of 0.15%. Wages heavily influence the prices charged for services and recent data reveal that wage growth is still running too high.

Although the base effect of high inflation in February 2023 should soften the year-on-year figure for February 2024, the latest inflation readings will do little to convince the ECB that consumer prices are heading in the right direction.


Written on Feburary 23, 2024. This is not an investment advice. Opinions subject to change.

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