Overview

• 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.