Eurozone inflation expected to increase
2011-03-01 18:16:35
EUROZONE inflation was lower than initially estimated in January but still well above the European Central Bank's target and likely to rise further in February due mainly to more expensive oil.
European Union statistics office Eurostat yesterday revised down its estimate for consumer price growth in the 17 countries using the euro to 2.3 percent year on year from an earlier projection of 2.4 percent and compared to 2.2 percent in December.
Month-on-month, prices fell 0.7 percent, more than the consensus of a 0.6 percent drop in a Reuters poll.
"The downward revision is due to a marked drop in Italian inflation due to a change in its methodology," said Howard Archer, economist at IHS Global Insight.
"The fact remains that eurozone consumer price inflation is still at a 27-month high and set to rise further in the near term due to the spike in oil prices as well as elevated commodity and food prices," Archer said.
Fuels for transport added 0.58 percentage points to the overall year-on-year reading and the rising costs of heating oil 0.19 percentage points. Electricity price rises added another 0.11 points and gas prices 0.1.
Fuel for transport was the main driver in the monthly number, but it was offset by January sales of clothes and a drop in vacation prices.