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Euro-Area Inflation in Line With Expectations

Euro-Area Inflation in Line With Expectations

David Schutz,

THE TAKEAWAY: Eurozone January CPI at 2.7% as expected -> inflation plays second fiddle to growth issues -> Euro strong on the day as market focus remains elsewhere

Inflation remained steady in Europe in January as European companies struggled with rising costs and weakening demand, suggesting that at this point, companies are still bearing the brunt of the credit crisis.

Consumer price index in the 17 nation that use the Euro came in at 2.7%, which was the same as the median forecast predicted by a team of economists, the EU statistics office said today.

Inflation is expected to be a secondary concern this year as economic growth remains the primary issues for policymakers. The region’s economy has been hard-hit by a barrage of negative developments caused by the ongoing credit crisis, including weakening domestic and international demand and rising prices for producers. ECB President Draghi recently cited rising energy costs as a primary catalyst for rising inflation.

Euro_inflation_in_line_with_expectations_body_BOE.png, Euro-Area Inflation in Line With Expectations

The Euro was relatively unaffected by the latest data as market focus remains on whether or not Europe will find a solution the issue of Greece.

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