As expected inflation in the euro zone remained high in December. The first estimate from the European Union’s statistics agency Eurostat shows it was unchanged from the November figure. That is due to a surge in food prices and the cost of crude oil in the final quarter of the year.
The December inflation figure for the 13 EU member states using the euro at that time was 3.1%, that compared with 3.38% in the United States. The breakdown of the figures for November showed inflation at 4.1% in Spain, 3.5% in Germany, 2.6% in France and 1.8% in the Netherlands.
December’s 3.1% is well above the European Central Bank’s preferred level for inflation which is close to, but less than, 2%. Economists expect the ECB to keep interest rates unchanged at 4% this year. The bank has to keep prices under control but if it puts up the cost of borrowing it risks a slowdown in the region’s economic growth.