Inflation also falls in France. After Germany and Spain, the provisional estimates published by Insee indicate that consumer prices in France dropped by a surprising 0,1% in December. The inflation rate in France it therefore fell to 5,9% on an annual basis, against 6,2% in November. Also in this case the improvement was higher than the expectations which instead were for a tightening of price growth. Underlying the decrease is falling energy prices but, experts warn, this drop could be temporary as last month the French National Institute of Statistics warned that the peak of inflation at 7% would be reached at early 2023, before declining more sustainably starting in March.
Looking at the other countries of the euro area, also in Germany, as in Spain, the upward trend in inflation slowed down at the end of 2022. The preliminary estimates published by the statistical office Destatis indicate that in December consumer prices in Germany decreased by 0,8% from the previous month, while on an annual basis the inflation rate increased by 8,6% against 10% in November and 10,4% in October, beating the predictions of around 9%.
Il inflation rate in Spain it fell to 5,8% in December from 6,8% the previous month.
Istat will communicate the estimates on the inflation rate in Italy in December tomorrow January 5th.
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Inflation rate: when is the ECB's next rate hike?
After the last board meeting on December 15th, the ECB will meet again on 2 February to decide whether to launch a new increase in rates, by what extent or whether to slow down on the way up. The meeting will be preceded by a Governing Council meeting on 25 January which will not take monetary policy decisions but which will nonetheless serve to sound out the Board's mood on the delicate issue of price trends. The last word has not been said: in fact, if the pressure on the Central Bank of Frankfurt grows to curb the rise in rates in an anti-inflationary key, it is too early to say whether the first good signals arriving on the price front will be sufficient to favor a more cautious.
In fact, both in Germany and in Spain, core inflation, which excludes the prices of food and energy and is the one followed most closely by the ECB, rose in December: respectively in the two countries from 5% to 5,1%, 6,3% and 6,9% to XNUMX%. The slowdown in consumer prices, in order to derail the train of restrictive monetary policy in the euro area, will have to be repeated and continued for more than a month, going beyond the one-off measures, and will have to tame medium-term expectations and contain the core inflation rate. Expectations remain high on the markets but investor sentiment may not coincide with that of the ECB.
