Eurozone inflation rises to 2.4% in December - flash estimate

(Sharecast News) - Eurozone inflation rose again in December to 2.4% on an annual basis, according to a flash estimate published on Tuesday, the third successive monthly rise.

The figure, in line with expectations, compared with 2.2% in November and October's 2%. The rise was driven by energy prices, said the European Union's statistical agency Eurostat.

Core inflation, which strips out volatile items such as energy and food prices, held steady at 2.7%. Services inflation grew slightly to 4%, while energy costs were up 0.1%, compared with a 2% fall in November.

Analysts at Oxford economic said annual inflation rates "don't yet fully reflect the easing in month-on-month price growth in recent months for services, which is the stickiest component of the inflation basket".

"Nevertheless, it is still too high to declare total victory just yet given services inflation is running at twice the inflation target," they added.

"As the rise in inflation has been expected by the ECB, it shouldn't deter the central bank from cutting rates this month. Communication from the central bank turned significantly more dovish at the December meeting as concerns around anaemic growth and a more benign inflation outlook means the ECB's reaction function is placing a greater emphasis on weak growth dynamics."

Reporting by Frank Prenesti for Sharecast.com