Eurozone CPI confirmed at five-month high, but inflation set to cool
By Benjamin Chiou
Date: Friday 17 Jan 2025
(Sharecast News) - Final estimates for the eurozone consumer price index confirmed that inflation had risen to a five-month high in December, though price pressures are expected to cool in the coming months.
According to Eurostat, the annual rate of CPI inflation last month was 2.4%, in line with the flash estimate released two weeks ago and up from 2.2% in November.
This was the third straight increase and the highest reading since July, with inflation rebounding significantly after dropping to a three-and-a-half-year low of 1.7% in September.
The recent up-tick in headline inflation across the single-currency region was mostly to do with increases in energy prices, due to the impact of significant energy price deflation in mid-2023 tailing off.
"While energy prices rose only modestly in the final months of 2024, annual price growth turned marginally positive in December after hitting -6% in September," said analysts at Oxford Economics.
These unfavourable base effects in energy prices are predicted to "reverse in early 2025, supported by some cooling in services inflation", they said.
As such, core inflation, which strips out volatile items like energy, food, alcohol and tobacco, remained at 2.7% for the fourth consecutive month in December, in line with the preliminary figures.
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