Current Inflation Trends
The latest inflation figures for the Eurozone indicate a stabilization around the European Central Bank's (ECB) target, marking the lowest rate since August. This development supports the outlook for maintaining short-term interest rates.
Key Contributors to Inflation Changes
The deceleration in inflation is primarily driven by a slowdown in service costs, which decreased to 3.4% from 3.5%, and a slight reduction in industrial goods prices excluding energy, which fell to 0.4% from 0.5%. Additionally, energy prices experienced a more pronounced decline, dropping by 1.9% compared to a previous decrease of 0.5%.
Mixed Signals in Food and Beverage Prices
Conversely, prices for food, alcoholic beverages, and tobacco have shown a slight uptick, rising from 2.4% to 2.6%. This highlights the uneven nature of the normalization process across different sectors.
Underlying Inflation Metrics
The core inflation rate, which excludes energy, food, alcoholic beverages, and tobacco, has decreased to 2.3%. This marks the lowest level in four months and falls slightly below market expectations of 2.4%.