Inflation dynamics in the Euro area came in below expectations in December, but this was mainly the result of decrease in energy prices.
Otherwise, underlying inflationary pressures in the Euro area remained very elevated in December, outpacing substantially both the ECB inflation target and the historical trends. Both the tariffs for services and the prices of non-energy industrial goods continued to expand at a rapid pace in December.
Persistently elevated underlying inflation pressures remain are a key reason for ECB to continue increasing the monetary policy rate.
