Inflation across Europe rose an annualized 2.9% in December, up from 2.4% in November and calling into question the timing of interest rate cuts.
The December gain was slightly less that the 3% consensus forecast of economists.
And core inflation, which excludes volatile energy, food, alcohol, and tobacco prices, declined to 3.4% from a reading of 3.6% in November.
The rise in inflation during December is being blamed on seasonal fluctuations in energy prices.
Still, the increase in headline inflation has sparked an immediate debate over the timing of the European Central Bank’s interest rate cuts, which are expected to begin by summer 2024.
Economists are warning that continued growth in inflation is likely to keep interest rates at current levels for longer than expected.
However, some analysts are saying that the December spike in consumer prices was expected among central bankers and unlikely to influence their decision on rates.
