Eurozone inflation falls to ECB target in December

Eurozone annual inflation eased to 2.0% in December from 2.1% in November, matching the European Central Bank's target and economists' expectations; services inflation also slowed and the ECB has said policy remains in a "good place."

Eurozone consumer prices rose 2.0% in December from a year earlier, the European Union's statistics agency reported. That rate is down from 2.1% in November and aligns with a consensus of economists. Services prices increased at a slightly slower pace after three months of faster rises. The release follows lower-than-expected inflation prints from Germany and France earlier in the week. Key facts: - Annual inflation in the eurozone was 2.0% in December, down from 2.1% in November. - The December reading matched economists' expectations reported by The Wall Street Journal. - Services inflation slowed after three months of faster increases, indicating some easing of price pressures. - The European Central Bank held its deposit rate at 2% at its Dec. 18 meeting, and President Christine Lagarde said policy is in a "good place." - The ECB projects inflation averaging about 2.1% in 2025, 1.9% in 2026, and reaching 2.0% on average by 2028. - The OECD has urged prudence, noting labor shortages and additional fiscal stimulus as possible upward pressures on prices. Summary: The decline to a 2.0% annual rate reinforces expectations that monetary policy can remain stable in the near term, as noted by ECB comments. The bank's forecasts show inflation hovering near target over the coming years. Undetermined at this time.