The battle against inflation in the eurozone is fought for every tenth. After the rebound in December, the rate remains close to 3%, after falling just one tenth in January to 2.8% year-on-year, according to data published this Thursday by Eurostat.
Core inflation, which does not take into account energy or food, alcohol or tobacco, remains at 3.3% after dropping another tenth. In this case it is its lowest level since March 2022, but analysts expected a greater drop, to 3.2%, according to the Reuters consensus.
With the cold data, the policy of the European Central Bank (ECB) of maintaining rates gains arguments. The entity recently opened the door to an interest rate cut towards the summer, but at its last meeting the president, Christine Lagarde, said that “it is still premature to discuss cuts.” The banker wants to see the evolution of salaries and whether disinflation is consolidated. The 2% objective pursued by the ECB is still far away. The same entity does not plan to achieve it until at least 2025.
“The drop in annual inflation was widespread, although there was a rebound in unprocessed foods,” said Alexander Valentin, an analyst at Oxford Economics. By chapter, services maintain their rate at 4%, which reflects the persistence of pressure on prices, with special attention to salaries. Non-energy goods cut half a point to 2% and energy maintains its lower price compared to last year, with -6.3%. Month on month, energy rises 0.9%, as countries withdraw aid plans launched after the war in Ukraine.
Looking country by country, an increase in inflation is seen in eight of the twenty. Among them is Spain, where the partial withdrawal of aid raises energy taxes and prices (3.5%). The highest rate is recorded in Estonia (5%), followed by 4.8% in Croatia or 4.3% in Austria or Slovakia. The case of the Netherlands stands out, which went from inflation of 1% to 3.1% in one month.
In Germany, the rate falls seven tenths to 3.1%, in France it does the same to 3.4% and in Italy it rises from 0.5% to 0.9%. “We expect a further slowdown in inflation,” says Valentin.
