The latest release from Eurostat – the European Union’s Statistics Office – suggests inflation eased slightly in December from the 3.0 percent recorded for the same month one year previously. Analysts feel that inflation could continue to decline giving rise to a growing expectation of a cut to European interest rates in the first quarter of the year.
“Assuming that the oil price does not rise again, we see this component knocking about 1 percent off the headline rate in 2012,” said Ben May, economist at Capital Economics. “Food inflation should also slow as the effects of past rises in agricultural commodity prices fade.”
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