Euro zone inflation falls to 1.4%

Price pressures are set to ebb further in the coming months

The European Central Bank targets inflation of below but close to 2 per cent.

The European Central Bank targets inflation of below but close to 2 per cent.

 

Euro zone inflation fell to 1.4 per cent in January on the back of a slower rise in energy prices.

The flash estimate, published by the European Commission’s statistics bureau, follows a reading of 1.6 per cent in December.

Price pressures are set to ebb further in the coming months as the impact of last year’s oil price rise on energy costs disappears from the index. The European Central Bank targets inflation of below but close to 2 per cent.

The core measure, which strips out price changes for energy and food and is seen as a better gauge of underlying price pressures, edged up slightly to 1.1 per cent from 1 per cent in December.

The core measure has remained weak despite the recovery of the eurozone economy and faster wage growth. Monetary policymakers hope the strength of the region’s labour market will eventually translate into slightly higher core inflation. – Copyright The Financial Times Limited 2019