Germany's inflation slowed more than expected at the end of last year, which did not provide sufficient reason for the ECB to change its current policy line. The German Federal Statistical Office said on Tuesday that following a 2.6% increase in the previous month, the consumer price index rose 2% year on year in December. The survey's median forecast was 2.2%. Prior to that, France's report earlier today and Spanish data last week also showed that price pressure was easing. Eurozone data will be released on Wednesday, and economists predict that the inflation rate will be at the target level of 2%. Policymakers have expressed confidence that inflation is back under control. Although the ECB's latest forecast indicates that price increases this year and next will be lower than the target value, the extent below the target is minimal — the stickiness of inflation in the service sector is still a cause for concern. Executive Committee member Schnabel said borrowing costs “are likely to remain stable for quite some time” unless there is any shock.

Germany's inflation slowed more than expected at the end of last year, which did not provide sufficient reason for the ECB to change its current policy line. The German Federal Statistical Office said on Tuesday that following a 2.6% increase in the previous month, the consumer price index rose 2% year on year in December. The survey's median forecast was 2.2%. Prior to that, France's report earlier today and Spanish data last week also showed that price pressure was easing. Eurozone data will be released on Wednesday, and economists predict that the inflation rate will be at the target level of 2%. Policymakers have expressed confidence that inflation is back under control. Although the ECB's latest forecast indicates that price increases this year and next will be lower than the target value, the extent below the target is minimal — the stickiness of inflation in the service sector is still a cause for concern. Executive Committee member Schnabel said borrowing costs “are likely to remain stable for quite some time” unless there is any shock.