Eurozone Inflation Rises to 2.4% in December

Eurozone inflation increased to 2.4% in December, marking a rise from 2.2% in November, primarily driven by a slight uptick in energy prices and stronger services inflation, which rose to 4.0%. While the European Central Bank (ECB) has cut interest rates four times in 2024, the persistent inflationary pressures suggest that future cuts will be gradual. Core inflation remains stable at 2.7%, indicating underlying inflation trends are holding steady. Economists predict that the ECB will proceed cautiously with interest rate adjustments in light of these developments and the weak economic outlook. Despite inflation expectations rising among households, economic growth forecasts have worsened, reflecting ongoing concerns about the eurozone's economic health. The ECB aims for a medium-term inflation target of 2%, complicating its monetary policy strategy amidst these pressures.