It turns out euro zone inflation was not quite as bad as initially calculated in January. The European Union statistics office has revised down its estimate to 2.3 percent year-on-year – the earlier projection was 2.4 percent.
But that lower figure is still well above the European Central Bank’s target and likely to rise further in February due mainly to more expensive oil.
And Howard Archer, an economist at IHS Global Insight, pointed out: “The downward revision is due to a marked drop in Italian inflation due to a change in its methodology.”
He added: “The fact remains that euro zone 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.”
The European Central Bank wants to keep inflation below, but close to two percent over a two-year horizon. The bank has said inflation was likely to peak in March, but that on average inflation in the euro zone may stay above two percent this year.