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MNI BRIEF: EZ Headline Inflation Falls, But Core Holds Firm

(MNI) London

The European Central Bank will take some comfort from the latest euro area headline inflation data, but another month of sticky core numbers will underline to policymakers that price pressures are becoming broader as higher food and energy and labour costs become engrained.

The January headline inflation number fell to 8.5%, down from 9.2% in December, below analysts expectations of a dip to 8.8%. However, it must be noted that Eurostat only used an estimate for Germany, as no data will be available from its federal stats office until next week. Core inflation -- prices excluding energy, food alcohol and tobacco -- was unchanged at 5.2% in January.

The data was released as the ECB's Governing Council meets to decide its latest rate move, with expectations of a further 50bps hike to be delivered Feb 2 as policymakers continue to battle higher prices. (MNI ECB WATCH: Set To Hike 50Bps, March Projections Key)

Source: Eurostat

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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