Eurozone inflation expected to rise to 2.4% in December, with further rate cuts predicted

From Morningstar: 2025-01-03 09:29:01

Eurozone inflation is expected to rise to 2.4% year over year in December, with core inflation stable at 2.7%. Analysts predict inflation will hit the ECB’s 2% target by 2025, leading to further rate cuts. In November 2024, services were the largest contributors to the annual inflation rate.

Goldman Sachs forecasts headline inflation to decrease to 2.63% year over year in December, with core inflation cooling in the upcoming months. The ECB lowered its inflation outlook to 2.1% for 2025, aligning with its 2% target. Analysts anticipate headline inflation to peak at 2.4% in December before declining below the target.

The ECB is expected to cut interest rates further in 2025, with some analysts predicting a decrease to as low as 1.50%. The bank’s cautious approach to monetary policy aims to support growth while preventing inflation. The deposit rate was reduced to 3.00% in December, with further rate cuts expected at the ECB’s January meeting.



Read more at Morningstar: Eurozone Inflation: What to Expect from December’s Data