Euro zone inflation exceeds ECB target
The European Union’s statistics office Eurostat has today revealed inflation in the euro zone rose more than expected in December.
Inflation rose 2.2% on an annual basis in December, up from 1.9% the previous month and represented the first time since October 2008 that it had exceeded the European Central Bank’s (ECB) target of just below 2%.
However, economists believe that despite today’s figures, the ECB will keep interest rates at the record low of 1% for the medium-term.
According to economists, the increase was attributed to higher energy and food prices.
In related news, the Baltic republic of Estonia adopted the euro on 1 January 2011 – becoming the euro zone’s 17th member.
Estonia, a country of 1.3 million people, had hoped to join the euro in 2007 but was prevented from doing so by high inflation.