Eurozone inflation slows as expected in January
Inflation in the eurozone fell to 1.3% year-on-year in January from 1.4% in December, in line with consensus and the initial estimate and moving further away from the European Central Bank's target of just under 2%, according to a final release from Eurostat on Friday.
Core inflation, which excludes energy, food, alcohol and tobacco, edged up to an annual rate of 1% from 0.9% the month before, supported by a rise in non-energy goods inflation.
Energy inflation fell to 2.2% year-on-year from 2.9% in December, while food, alcohol and tobacco prices slipped just 0.1 percentage points to 1.9%.
Meanwhile, in the European Union, annual inflation came in at 1.6% in January from 1.7% in December 2017.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "Inflation pressures in the euro area remained weak at the start of 2018.
"The sub-components in the EZ core index are very volatile at the moment; the headline is being pushed around by crashing prices of Italian education services, German car insurance price volatility and base effects in French telecoms inflation. Looking through the noise, though, leading indicators signal a clear upward trend."
Anthony Kurukgy, senior sales trader at Foenix Partners, said: "In the latest minutes released, ECB members appeared to be split over the bank’s communications on its policy intentions regarding its ‘forward guidance’ programme. With Inflation being highlighted as the catalyst that may spark a change in timeline, today’s reading won’t help the members calling for a premature change to the ECB’s monetary position."