Energy Prices Drive Inflation Higher
One of the key factors behind the latest inflation uptick was energy, which saw an increase of 1.8% in January, sharply higher than December’s 0.1%. This marks a significant turnaround from the energy deflation seen throughout much of 2024. If energy prices continue to rise, inflation could remain sticky, complicating the ECB’s policy outlook.
Meanwhile, services inflation remained elevated at 3.9%, just below December’s 4.0%. Given that services inflation tends to be more persistent, this could signal underlying price pressures that may take longer to subside.
Core Inflation Stays at 2.7%, Surpassing Estimates
The Core CPI held firm at 2.7%, unchanged from December but above the forecasted decline. This signals that underlying inflationary pressures remain stubborn, reinforcing concerns that price growth is not…
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