Annual inflation in the eurozone was down in December, according to preliminary figures released by Eurostat. Consumer prices in the currency bloc, measured by the Harmonised Index of Consumer Prices, were up by 1.4 per cent in December, down from 1.5 per cent in November.
This was in line with the initial estimate published on January 5.
Inflation remains below the European Central Bank’s target of ‘below, but close to two per cent’.
On a monthly basis, consumer prices advanced by 0.4 per cent. Excluding energy, food, alcohol and tobacco, core inflation held steady at 0.9 per cent in December.
Meanwhile in the United Kingdom, the rate of inflation fell for the first time in six months in December, helped by lower airfare costs and a fall in the price of games and toys.
The consumer price index fell to three per cent last month from a five-year high of 3.1 per cent in November, raising the prospect that inflation may have peaked.
Economists had expected the rate to moderate as the effects from the fall in sterling since the Brexit vote – which pushed up the cost of imports – begin to drop out of the inflation calculation. Core inflation slowed to 2.5 per cent in December from 2.7 per cent in November. It was forecast to slow to 2.6 per cent.
The Bank of England forecasts inflation to slow this year, to 2.4 per cent by the fourth quarter. It is expected to keep its key rate unchanged at 0.50 per cent at its next meeting on February 8.
Finally in the United States, a report released by the Commerce Department showed a steep drop in new residential construction in December. The report showed that housing starts fell by 8.2 per cent to an annual rate of 1.192 million in December from the revised November estimate of 1.299 million, which was the fastest increase in 13 months.
On the other hand, housing permits issued held steady to finish the strongest year for housing construction in a decade. A separate report showed homebuilders’ confidence in January at the second-highest level since 2005.
This report was compiled by Bank of Valletta for general information purposes only.