Headline inflation in the eurozone eased slightly in January, signal data released by the European Union’s statistics office showed, while core inflation fell less than expected, News.ro reported, citing CNBC.

Annual growth in core prices was 2.8 percent, according to forecasts of economists polled by Reuters.

Inflation was 2.9% in December against 2.4% in November, mainly due to the termination of energy price support measures.

Core inflation slowed to 3.3% in January from 3.4% in December.

A Reuters forecast pointed to a slowdown to 3.2 percent last month.

Across sectors, services inflation – an important indicator for policymakers because of its link to domestic wage pressures – remained steady at 4%.

The disinflationary impact on the energy market continued to decrease from -6.7% to -6.3%.

Economic growth in the euro zone is stagnating

Preliminary data released earlier this week showed that inflation in Germany slowed slightly more than forecast to 3.1%.

The eurozone’s biggest economy has been one of the main drags on growth, with Germany’s gross domestic product contracting 0.3% in the fourth quarter.

European Central Bank officials are monitoring a range of data to see if and when they can start cutting interest rates from their current record highs.

Price growth has slowed significantly from a peak of 10.6% in October 2022, moving closer to the central bank’s target of 2%.

While markets continue to expect interest rate cuts to begin in April, some policymakers are suggesting the cut could come in the summer or even later.

The ECB emphasizes that its decisions remain data-driven.

At last week’s monetary policy meeting, when interest rates were left unchanged, ECB President Christine Lagarde said “the process of reducing inflation continues” despite the December hike.