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Euro zone inflation eases to 8.6% in January from 9.2% in December

Euro zone inflation eased to 8.6% in January from 9.2% in December, new Eurostat figures show
Euro zone inflation eased to 8.6% in January from 9.2% in December, new Eurostat figures show

Inflation in the euro area fell back to an annual rate of 8.6% in January from 9.2% in December, according to new figures from Eurostat.

This is marginally higher than the 8.5% "flash" estimate produced earlier this month.

The flash estimate had been produced using estimated figures for Germany which were not ready at the time due to what its national statistical agency described as "technical reasons".

Inflation in Germany in January was 9.2%, today's figures show.

Inflation in Ireland as measured by the Harmonised Index of Consumer Prices, which allows for comparisons across the EU. was 7.5%. Measured by the CSO's Consumer Price Index, inflation stood at 7.8% in January.

Energy inflation across the euro area was 18.9% in January, down from an annual rate of 25.5% in December.

Food inflation rose to 14.1%, up from 13.8% in December.

A measure of core inflation, which strips out the price of energy and unprocessed food, rose to 7.1% in January from 6.9% in December. Another widely observed measure which includes alcoholic beverages rose from 5.2% to 5.3%.

The European Central Bank's next Governing Council meeting is in March.

It has already indicated it intends to raise interest rates by another half of one percent at that meeting. The ECB's base deposit rate is currently 2.5% following five interest rate rises since last July.

Some market observers now believe euro area interest rates may peak at 3.75%.