Eurozone core inflation creeps higher in January

Eurozone headline consumer inflation slowed down in January, driven by a decline in energy price growth. However, core inflation across the economic bloc creeped higher in the first month of the year, according to data by the Eurostat.

Consumer prices across the 19 countries that make up the eurozone slid 1% month-on-month in January, representing a 1.4% year-on-year rise, which met market expectations, Eurostat said in a press release.

Cheaper energy prices slow consumer inflation

Energy prices across the economic bloc fell by 0.9% in the first month of the new year but were 2.7% higher compared with those in January 2018, slowing sharply from 5.5% year-on-year growth in December and a 9.1% rise in November.

Removing more volatile components like energy prices and unprocessed food, which the ECB counts towards core inflation, prices across the eurozone fell by 1.2% month-on-month, representing a 1.2% year-on-year increase, up from 1.1% in annual terms in December.

ECB concerned over eurozone economic outlook

At the last ECB policy meeting, its committee admitted that it was concerned about the eurozone’s economic outlook and advised that banks be allocated more long-term loans to take pressure of the ailing economy.

The ECB’s stance is the result of weaker than expected growth for the third consecutive quarter and with strong signals of a global economic slowdown, policymakers are worried that the eurozone’s recovery could come undone.