Eurozone inflation rebounds sharply in January

Eurozone inflation rebounded in January, according to official data released on Tuesday, ending months of falling prices.

According to Eurostat, the European Commission’s statistics office, headline consumer price inflation reached 0.9% in January compared to a 0.3% decline in December. The reading, an 11-month high, confirmed Eurostat’s flash estimates published earlier in February.

Across all 27 member states, the inflation rate was 1.2% compared to 0.3% in December.

A year earlier, the January rate for the eurozone was 1.4%, and 1.7% across the wider bloc.

The highest contribution came from the services sector, where prices were 0.65 percentage points higher. The was followed by non-energy industrial goods - up 0.37pp - and food, alcohol and tobacco, up 0.33pp. Energy costs were down by 0.41pp.

Core inflation, which strips out more volatile food and energy prices, rose to 1.4% from 0.2% in January.

Among individual countries, the highest annual rates were seen in Poland, at 3.6%, and Hungary, at 2.9%, while the lowest rates were in Greece, off 2.4% and Slovenia, down 0.9%.

Germany, the eurozone’s largest economy, saw inflation rise 1.6%, compared to December’s 0.7% decline, while France, Spain and Italy reported rises of 0.8%, 0.4% and 0.7% respectively.