European Annual Inflation Reached 1.8% in January

Euro-area inflation accelerated more than forecast to effectively reach the European Central Bank’s goal, which may intensify a debate among policy makers about their long-running stimulus programs.

The 1.8 percent annual increase in consumer prices in January was the fastest since early 2013 and beat the 1.5 percent median forecast in a Bloomberg survey. That’s in line with the ECB goal of just below 2 percent, though the less-volatile core rate remains at just half that level.

While largely driven by higher oil prices, the inflation pickup is feeding into questions about the appropriate degree of monetary stimulus for the 19-nation currency bloc. ECB President Mario Draghi has repeatedly stressed that underlying price pressures are still weak and he wants certainty that the acceleration will prove durable, though German policy makers have started to push for a discussion about winding down quantitative easing.

via Bloomberg

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