Eurozone inflation weaker than estimated in January

Eurostat’s final reading on Eurozone inflation for January has come in a little softer than originally estimated and still way off the European Central Bank’s target of just under 2%, adding weight to the argument for further stimulus.

According to figures published on Thursday, the annual inflation rate in the euro bloc rose to 0.3% in January. This was below 0.2% the previous month and missed consensus and the initial estimate of 0.4%.

Dennis de Jong, managing director of UFX.com, said: “Mario Draghi will be concerned that inflation has dipped back down from last month’s 0.4% reading, which was the highest since October 2014, and there are a number of very real serious concerns for the ECB.

“Inflation was expected to have risen further by this stage, which heightens the likelihood of further stimulus as early as next month. Caution is very much the watchword for Draghi and co at present.”