Producer prices in the euro zone stayed unchanged from November to December, and their annual growth slowed, data showed today.
European Union statistics office Eurostat said industrial producer prices in the-then 12 countries using the euro remained flat month-on-month for the third month in a row, curbing the year-on-year rise to 4.1 per cent from 4.3 per cent in November.
A 0.2 per cent monthly decline in energy prices offset 0.1 per cent increases in producer prices of capital goods and of durable and non-durable consumer goods.
In year-on-year terms, however, energy costs and intermediate goods prices - both up 6.2 per cent - were still the main drivers of the overall gain.
Month-on-month producer prices remained flat in December against November in the euro zone's biggest economy, Germany; eased 0.1 per cent in the second-biggest, France; and rose 0.2 per cent in third-biggest, Italy.
Unless absorbed by wholesalers and retailers, producer price rises push up consumer price inflation, which the European Central Bank wants to keep just below 2 per cent.
Consumer price inflation was 1.9 per cent year-on-year in January, unchanged from December. But economists reckon stronger-than-previously expected economic growth, a tightening labour market and strong credit growth will trigger more interest rate rises this year.
They expect the ECB to raise interest rates by 25 basis points to 3.75 per cent in March to stem inflationary pressures but are divided over whether the bank would then pause or raise rates once more