LONDON: Lower energy costs kept a lid on inflation across the 19-country eurozone economy in December, official figures showed on Tuesday, in a development that could buoy consumers but frustrate policymakers at the European Central Bank eager to see more substantial price rises.
In an initial estimate, the European Union’s statistics agency found that annual consumer price inflation held steady at 0.2 per cent. The rate was positive for a third month but was below market expectations for an increase to 0.3pc and far short of the European Central Bank’s target of just under 2pc.
Energy prices are the main cause for the subdued inflation, though their 5.9pc drop in December was the smallest decline since July. That’s because price levels are compared with a year earlier and much of the fall in oil prices occurred before then.
Analysts say oil prices may weigh on inflation even less in the next few months, helping the overall inflation rate to rise.