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ECB Faces a Problem: Euro Area Services Inflation Stuck at 4.0% for 13th Month. CPI Accelerates Further, as Energy & Durable Goods Stopped Plunging

January 20, 2025

Inflation far from over. ECB risks throwing fuel on top of it.

Services inflation in the 20 countries that use the euro accelerated to +4.0% in December, according to Eurostat today. This marks the 13th month in a row that the services CPI has been in the 4.0% range, roughly two to four times what prevailed before the pandemic (between +1% and +2%), and two full percentage points above the peaks before the pandemic and not making any progress at all (red in the chart below).

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