In numbers .. Energy prices raise the inflation rate in the euro area

The European Statistics Agency (Eurostat) announced in its initial estimates that the inflation rate in the euro area recorded a slight increase last month due to the high energy prices.
It is unlikely that this slight height will lead to the bank’s retreat from moving forward in reducing its monetary policy.

Inflation in the euro area

The inflation rate was 2.5% during January, while analysts expected to continue at its level in the previous month and was 2.4% annually.
Meanwhile, which excludes the most volatile goods such as food and energy at 2.7% unchanged from December.
The high inflation rate in general, was driven by the increase in energy prices during January by 1.8% compared to 0.1% during December.

Food prices in Europe

The rate of high food and tobacco prices fell to 2.3% during the past month, compared to 2.6% during the previous month.
The prices of non -energy industrial products increased by 0.5%, while the rate of inflation of services prices fell from 4% to 3.9% during the same period.
Jack Allen Reynolds, Economist at the Capital Economics Foundation, said it is possible that the basic inflation rate will decrease to touch the level of 2% by summer, with the possibility of a decrease from this level in the second half of this year.

Upon interest rates in Europe

Bert Coleen, economist at ING, said that the European Central Bank believes that the economy is in a stagnation, and is fully convinced that inflation is now under control.
With the continued inflationary risks and the increasing state of uncertainty, the question is to what extent the European Central Bank can reduce interest rates to give the economy more space for recovery, according to Cullen.
Last week, the European Central Bank reduced interest rates for the fourth time in a row by a quarter of a percentage point.