Annual consumer price growth in the euro zone remained stable last month against November at the expected 1.9 per cent while the less volatile core inflation watched by the ECB stabilised at 1.6 per cent, data showed.
European Union statistics office Eurostat said today that consumer prices grew by 0.4 per cent month-on-month in December as expected by the markets, driven by package holiday costs, hotels and transport.
In year-on-year terms, December inflation was driven mainly by higher gas and electricity prices as well as restaurants and cafes, vegetables and tobacco.
Energy prices grew by 2.9 per cent year-on-year, a far cry from the double-digit growth in the same period a year earlier, but still a sharper increase than November's 2.1 per cent.
Food, alcohol and tobacco prices went up 2.7 per cent in annual terms in December, slowing from 3 per cent in November.
But without energy and unprocessed food - a measure the European Central Bank and the European Commission call core inflation - prices grew by 0.4 per cent month-on-month and 1.6 per cent year-on-year - the same as in November and October.
The ECB wants to keep headline inflation just below 2 per cent and has raised interest rates six times since December 2005 to stem price growth pressures from relatively robust expansion in the euro zone economy.
Economists expect the ECB to raise interest rates again by 25 basis points to 3.75 per cent in March, and probably at least once more later in the year as the economy is expected to continue to grow, albeit more slowly than in 2006.
Eurostat also said the euro zone had a seasonally unadjusted trade surplus of €3.1 billion ($4 billion) in November, up slightly from a revised €3 billion surplus in October as exports rose 12 percent and imports only 7 per cent.
Seasonally adjusted, the surplus was even higher, at €4.5 billion, up from €2.4 billion in October with exports up 1.7 per cent and imports falling 0.1 per cent.