Eurozone inflation edges up to 0.4 per cent but is still way off the European Central Bank’s target
Eurozone inflation crept up slightly to 0.4 per cent in January, but remains far from the European Central Bank’s target of just under two per cent.
Consumer prices grew from a rate of 0.2 per cent in December, according to official figures from Eurostat.
The services sector picked up in January, coming in at 1.2 per cent compared to 1.1 per cent in December, while food, alcohol and tobacco fell marginally to 1.1 per cent, compared to 1.2 per cent the previous month.
Once again, energy prices proved to be the biggest deflationary drag on figures, falling 5.3 per cent.
However, this was an improvement on the 5.8 per cent decline in energy prices in December and will have helped boost the overall inflation figure for January.
But this is a technical adjustment rather than a material change, as it reflects the fact that the drop in oil prices early last year is starting to fade out from the 12-month comparative figure.
ECB boss Mario Draghi is expected to provide further monetary stimulus measures very soon in order to boost the stagnant eurozone economy. Last week he warned that inflation in the economic area is likely to remain very low or negative in the coming months.