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Inflation is going down a bit – but many goods are still significantly more expensive


Inflation in the euro zone weakened somewhat in December. From the point of view of economists, the numbers still represent an alarm signal.

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Grocery shopping: Experts speak of a price-wage spiral

Photo: Yui Mok / dpa

Inflation in the eurozone eased more than expected in December.

Consumer prices rose by 9.2 percent compared to the same month last year, according to an initial estimate from the Eurostat statistics office in Luxembourg.

In November, the inflation rate was still 10.1 percent.

The decline was stronger than expected.

Economists had expected an average rate of 9.5 percent in December.

The core inflation rate excluding energy and food, on the other hand, rose from 5.0 percent to 5.2 percent.

Economists had expected 5.1 percent.

Economists are currently paying particular attention to this figure because it gives an indication of the extent to which companies are passing on the cost increases, particularly in the energy sector, to consumers.

This in turn can result in so-called second-round effects in the form of higher wage demands.

Experts speak of a price-wage spiral.

The price target of the European Central Bank (ECB) of two percent in the medium term is still clearly exceeded.

After raising interest rates sharply by 0.75 percentage points, the ECB slowed the pace of interest rate hikes at its December meeting and raised the base rate by 0.50 points.

However, she promised further increases.


Source: spiegel

All business articles on 2023-01-06

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