{"id":267487,"date":"2026-02-04T16:54:08","date_gmt":"2026-02-04T16:54:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/267487\/"},"modified":"2026-02-04T16:54:08","modified_gmt":"2026-02-04T16:54:08","slug":"euro-zone-inflation-cools-to-1-7-in-january","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/267487\/","title":{"rendered":"Euro zone inflation cools to 1.7% in January"},"content":{"rendered":"

Illustration of food items placed on the belt of a cash register in a Leclerc supermarket in Valence, France, April 4, 2025. <\/p>\n

Nicolas Guyonnet | Afp | Getty Images<\/p>\n

Euro zone inflation cooled to 1.7% in January, flash data from statistics agency Eurostat showed<\/a> Wednesday. <\/p>\n

Economists polled by Reuters had expected the inflation rate to dip to 1.7%, down from 2% in December.<\/p>\n

Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, stood at 2.2% in January, down a touch from the 2.3% seen in the year to December.<\/p>\n

The latest data shows the key inflation rate has now dipped below the European Central Bank’s 2% target, meaning it’s likely to steer clear of any more rate cuts for the foreseeable future. <\/p>\n

Cautious approach<\/p>\n

The central bank next meets on Thursday and is expected to hold its benchmark interest rate at 2%. Economists expect no change in the coming months either, but note that there are a few factors that might change the\u00a0ECB’s stance. <\/p>\n

Lorenzo Codogno, founder and chief economist at Lorenzo Codogno Macro\u00a0Advisors, said these could include an escalation of geopolitical tensions, a sharp appreciation of the euro, or somewhat higher-than-expected inflation prints. <\/p>\n

“The\u00a0ECB\u00a0remains in a ‘good spot’ or ‘good place,’ but\u00a0ECB\u00a0speakers may become more reluctant to use such wording amid global uncertainty and fragility,” he said in emailed comments Tuesday. <\/p>\n

“I continue to see a small downside risk for policy rates in the near term and some upside risk in the medium term. Yet the baseline scenario remains the same: no change in 2026 and 2027, with the bar for action high,” he noted. <\/p>\n

Paul Hollingsworth, head of DM Economics at BNP Paribas Markets 360, agreed that the threshold for any policy action this year was high, and the next move could well be a hike.<\/p>\n

“We see a high bar for any policy action, and stronger-than-anticipated underlying price pressures suggest the ECB will favour a steady hand for a prolonged period,” he said in emailed comments last week.<\/p>\n

“We continue to see the next move as a hike, in the third quarter of 2027, by which point we expect more evidence of stronger domestic price pressures stemming from the impact of higher defence and infrastructure spending,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Illustration of food items placed on the belt of a cash register in a Leclerc supermarket in Valence,…\n","protected":false},"author":2,"featured_media":267488,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[2342,15619,138,553,219,111,139,69,12937],"class_list":{"0":"post-267487","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-breaking-news-economy","9":"tag-breaking-news-europe","10":"tag-business","11":"tag-business-news","12":"tag-economy","13":"tag-new-zealand","14":"tag-newzealand","15":"tag-nz","16":"tag-prices"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/267487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=267487"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/267487\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/267488"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=267487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=267487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=267487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}