Inflationary pressures in the eurozone deteriorated for the third month in a row in December. At the end of the year, prices of goods and services rose by an average of 2.4 percent compared to November. This is the highest level since July 2024.
People had to dig deeper into their pockets, especially for services and food. Services increased in price by four percent in December, making them the largest price determining factor. Core inflation, which excludes volatile energy, food, alcohol and tobacco prices, remained at 2.7 percent in December.
At the end of the year, Belgium and Croatia had the highest inflation of the twenty euro countries, 4.4 and 4.5 percent respectively. It was lowest in Ireland (1 percent) and Italy (1.4 percent). In Austria this was 2.1 percent in December.
Will the policy interest rate be lowered?
In November, inflation in the eurozone was 2.2 percent, in October 2 percent and in September 1.7 percent. Economists assume that the European Central Bank (ECB) will cut the policy rate again at the end of January. The interest rate at which banks can get fresh money from the central bank is currently 3.15 percent.
Due to the weak economy, inflation is expected to gradually decline over the course of the year. The ECB aims for inflation of two percent in the medium term. In December it cut key interest rates by 0.25 percentage points.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
