Eurozone Verbraucherpreise

The annual inflation rate in the Euro Area accelerated for a third straight month to 2.4% in December of 2024, the highest rate since July, compared to 2.2% in November and aligned with both market expectations and the preliminary estimate. The increase was largely due to base effects, as last year’s sharp declines in energy prices are no longer factored into annual rates. Costs rebounded for energy (0.1% vs -2% in November) for their first positive change since July, and inflation accelerated slightly for services (4% vs 3.9%). In turn, inflation slowed slightly for food, alcohol, and tobacco, as the fast price growth for processed food, alcohol, and tobacco (2.9% vs 2.8%) was offset by the slowdown for unprocessed food (1.6% vs 2.3%). Inflation increased in Germany (2.8% vs 2.4%) and France (1.8% vs 1.7%), but slowed in Italy (1.4% vs 1.5%). Meanwhile, core inflation steadied at 2.7%. The ECB expects inflation to move back to the 2% target by the year-end.