Headline inflation in the euro zone rose to 2.9% in December, up from 2.4% in the previous month, according to Eurostat data. However, core inflation, excluding energy, food, alcohol, and tobacco prices, decreased to 3.4% from November’s 3.6%, CNBC reports.
The overall increase in inflation is attributed to base effects from the energy market, with energy prices down 6.7% year-on-year in December, compared to an 11.5% drop in November.
This data contributes to the ongoing debate over the European Central Bank’s policy trajectory, with markets expecting rate cuts before the summer. Analysts note that the rise in headline inflation is considered a technicality and may not significantly impact central bank decision-making.
