The Euro area annual inflation is forecast to drop to 0.7 percent in January 2014, down from 0.8 percent the previous month, according to a flash estimate from Eurostat, the statistical office of the European Union. The announcement refuels worries about deflation in the euro area given that the January rate is well below the European Central Bank’s (ECB ) target of about 2 percent.
Eurostat expects the food, alcohol & tobacco category to post the highest annual rate in January (1.7 percent, compared with 1.8 percent in December), followed by services (1.1 percent, compared with 1.0 percent in December), non-energy industrial goods (0.2 percent, compared with 0.3 percent in December) and energy (-1.2 percent, compared with 0.0 percent in December).
Simona Bazavan