Increased EU inflation to 4.9 percent

reports Mehr News Agency , prices in Europe remained higher than the 5 % target of the European Central Bank, while it is not expected to change policymakers’ plan to continue reducing interest rates.

Eurostat , EU Statistics Office reported on Monday that consumer price in January reported 4.9 % more than one Last year, it was more than 1.5 % of analysts’ expectations and more than 4.9 percent in December.

, however, inflation in recent months has been largely due to rising energy prices, which is reduced by the main inflation rate. It is not expected that the acceleration of inflation rise since September will affect monetary policy because inflation has been less than the European Central Bank’s forecast in the past few months.

inflation numbers are released as US President Donald Trump has announced the implementation of 2 % tariffs on Canadian and Mexican goods since Tuesday, although Canadian energy products are subject to 5 % tax They will be. He also applied 5 % additional tariffs on Chinese goods.

Trump said 5 % of EU taxation “will definitely happen”. Economists warn that US customs tariffs at that level on the import of the euro zone, followed by a broader economic uncertainty, can hit the economy in the currency block within one year.

EU leaders have pledged to respond to possible tariffs imposed on the union. But Brett Colin , Economist in Ing, warned that EU retaliatory tariffs increased inflation It is because tariffs usually lead to increased consumer price.
He added that despite inflationary risks and increased uncertainty, the question is how much the European Central Bank can lower the rates to give the economy more breathing space.
The inflation of the service sector is still significantly higher than the European Central Bank’s target of 4.9 percent in January, but the central bank is confident that this year will decrease with a reduction in wage pressure. The main inflation, which does not include unstable food and energy prices, was 4.9 %, which was not changed from December and was higher than analysts’ expectations for 4.9 percent.

Jack Allen Reynolds, economist at the Consulting Institute Capital Ecnomixics says that January inflation data does not change the view of European Central Bank policymakers on the possible short -term path of interest rates. The fact that high service inflation remains means that they prefer to reduce politics in small steps.

The Central Bank last week reduced borrowing costs to 4.9 % last week, indicating that inflation rates reach a 5 % target during the year. “The process of reducing inflation is well in the right direction,” said Lagarde , the head of the European Central Bank, after a decision on Thursday. We know the direction of travel and the speed, time and rate of future rate changes will be decided in the next session.
The official data released last week shows that the euro-zone economy did not record growth in the last three months of the year, indicating a sharp decrease in growth of 4.9 percent in the third quarter. Germany’s GDP declined by 4.9 percent in the last three months of the year compared to the three months ago, while the French economy unexpectedly shrinked. Production was fixed in Italy.