Eurozone inflation fell by more than expected last month but underlying price pressures rose, making it likely the European Central Bank will continue raising interest rates for months to come
Consumer price growth in the bloc that expanded to 20 nations when Croatia joined on January 1, slowed to 9.2% in December from 10.1% a month earlier.But this seemingly good news masked a more malignant trend as the biggest chunk of the decline came from lower energy prices while all key components of core inflation accelerated.
Another worry is that headline inflation may have dipped on a host of one-off or temporary measures, including government subsidie.But even if price volatility is set to be high over the coming months, inflation has likely peaked and the real issue is just how quickly it will fall back towards the ECB's 2% target.
The ECB has also promised big hikes in both February and March in what is already the most aggressive policy tightening cycle in its history.
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