Eurozone inflation unexpectedly increased to 2.5% in January, surpassing the European Central Bank's (ECB) target for the third consecutive month. This rise, reported by Eurostat, exceeded analysts' expectations of 2.4% and followed a December rate of 2.4%.
The inflation spike is largely attributed to a temporary dip in energy prices a year prior, leading to an artificially low annual comparison. Despite the uptick, the ECB is not expected to alter its strategy of lowering interest rates, having already cut rates for the fifth time since June, bringing them to 2.75%.
ECB President Christine Lagarde emphasized that the disinflation process remains on track, suggesting further rate cuts may occur in the coming months. Core inflation, which excludes food and energy prices, remained steady at 2.7%, exceeding analysts' forecasts of a decline.