Euro Zone Inflation Fails to Meet Expectations

The euro zone’s rate of inflation remained unchanged in December at 0.2 percent year-on-year, according to preliminary data from Eurostat, below expectations for a 0.3 percent rise.

Core inflation, which strips out volatile prices like unprocessed food and energy, stood at 0.8 percent, year-on-year, below a consensus forecast of 0.9 percent, according to analysts polled by Reuters.

Last month, data from the European statistics agency showed that inflation in the 19 country currency bloc stood at 0.2 percent in the year to November, revised up from an initial reading of 0.1 percent.

The latest inflation data will be food for thought for the European Central Bank. In December, the ECB announced that it would extend the duration and range of assets eligible for purchase within its stimulus program aimed at fending off sluggish inflation and lackluster growth.

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.