Inflation falls slightly to 2.8 per cent

Inflation in the euro zone abated slightly at the start of the year. Consumer prices in January were 2.8 per cent higher than a year ago, according to the Eurostat statistics office. In December, inflation was running at 2.9 per cent, although analysts had assumed on average a rather larger fall to 2.7 per cent.

The price trend is nevertheless again approaching the target of the European Central Bank (ECB), which is aiming at two per cent in the medium term. For over eighteen months the ECB has been countering inflationary pressure, which reached a record high of 10.7 per cent in autumn 2022, with substantial interest rate rises. Significant rate reductions are expected from the ECB this year as inflation recedes.