According to Eurostat, annual inflation in the euro area for December confirmed preliminary estimates and amounted to 2.4%. This is the third consecutive month of growth and in contrast to November's 2.2% is the highest since July.
December's figures were mainly due to base effects, as the annual rate no longer takes into account the drop in energy prices seen last year, Euronews reported.
Energy costs rose 0.1% in December from -2% in the previous month, the first positive reading since July. Services inflation also rose to 4% in December from 3.9% in November.
On the other hand, increases in alcohol, food and tobacco fell marginally as increases in processed food prices, as well as tobacco and alcohol, were slightly offset by a fall in unprocessed food prices.
Inflation in Germany rose to 2.8% in December from 2.4% in November, while that in France rose to 1.8% from 1.7% in the previous month. Italian inflation fell to 1.4% in December from 1.5% in the previous month.
The annual rate of underlying price increases in the euro area reached 2.7% in December, the same as in the previous three months, while in line with analysts' estimates. Core inflation excludes alcohol, tobacco, food and energy prices due to their volatility.
Inflation in Germany is rising mainly due to higher prices for food and services. In addition, energy prices are falling more slowly, worsening inflation.
France has been affected by many of the same economic factors as Germany, with rising electricity tariffs contributing to the problem. Ongoing supply chain problems and sluggish consumer and business confidence have complicated market conditions.
The decline in inflation in Italy was mainly due to the fall in prices of industrial goods and services. | BGNES
