Preliminary data published by Eurostat showed that consumer price growth unexpectedly accelerated in December - to 5% per annum from 4.9% per annum in November. Economists had expected a slowdown in price growth to 4.7% per annum. For the ECB, the target inflation rate is 2%. Meanwhile, on a monthly basis, prices rose by 0.4%, as in November.
The data also showed that in December, the core CPI - excluding energy and food prices - increased by 2.6% per annum after a similar increase in November. Economists had expected an increase by 2.5%.
Eurostat reported that the acceleration of price growth compared to December 2020 was due to an increase in the cost of energy (+26% per annum), food, alcohol and tobacco (+3.2% per annum), non-energy industrial goods (+2.9% per annum) and services (+2.4% per annum).
Economists note that the rise in inflation to a new record high confirms that price pressure has not completely eased yet and that ECB policymakers underestimate the situation. Given that core inflation is also above 2%, it will continue to put pressure on the ECB to take action.