Euro area inflation accelerated from 2.2% YoY in November to 2.4% YoY in December, the highest rate since July. Core inflation was unchanged at 2.7% YoY, however, where it has been since September. Both rates were in line with expectations.

On a monthly basis, HICP inflation was 0.4% MoM and core inflation was 0.5% MoM. The headline acceleration came from an 0.6% MoM increase in energy prices while food prices actually fell slightly -0.1% MoM. Non-energy goods saw a decline of -0.1% MoM but was offset by a strong increase of 0.8% MoM in services prices which are back to an annual rate of 4.0% YoY.