Euro zone inflation rose to 2.4 per cent in December, in the third rise in as many months.
The figure was in line with market expectations, according to a survey of economists by Reuters, and compared with November’s rate of 2.2 per cent.
The rise in inflation comes as the European Central Bank (ECB) seeks to boost the region’s flagging economy with interest rate cuts.
The ECB has cut interest rates four times since June and is widely expected to lower the benchmark deposit rate from 3 per cent later this month.
Some investors have been hoping for a big cut to soothe concerns over weak growth in the single currency zone. However, the increase in price pressures may make a smaller 25 basis point cut more likely.
The ECB expects inflation to fall back to close to its 2 per cent target over the course of this year.
German two-year Bund yields, a benchmark for the euro zone, fell 0.02 percentage points to 2.18 per cent after the figures were published.
What’s in store for 2025?
European equities were little changed, with the region-wide Stoxx Europe 600 up less than 0.1 per cent.
The euro held on to earlier gains against the dollar, up 0.3 per cent on the day at $1.043. – Copyright The Financial Times Limited 2025
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