Eurozone Inflation Rises to 2.5% in January, Driven by Energy Costs

The European Central Bank signals further rate cuts as inflationary pressures persist and economic growth remains weak.

Eurozone inflation increased to 2.5% in January from 2.4% in December, exceeding economists' expectations, primarily due to higher energy costs.
Core inflation, which excludes volatile items like food and energy, remained steady at 2.7%, while services inflation slightly declined to 3.9%.
The European Central Bank (ECB) cut interest rates for the fifth consecutive time last week and is expected to implement additional reductions in March and beyond.
Policymakers anticipate inflation to approach the ECB's 2% target by summer, though risks from potential U.S.-EU trade tariffs could disrupt this outlook.
Weak economic growth in the eurozone, exacerbated by structural issues and high energy prices, continues to challenge recovery efforts.