Annual inflation accelerated across the 16 nations using the euro in December, with the rate of increase for consumer prices nearly doubling, official data showed.
Prices climbed 0.9 per cent according to a flash estimate from the European Union's Eurostat data agency – a loosening from the 0.5 per cent revised reading for November that marked the first time prices, compared to one year earlier, had risen since April. Analysts said the rise mainly reflected energy costs which have risen again after a collapse in the price of oil and gas during the crisis.
"The spike... and the prospect of further increases in early-2010 is unlikely to worry the European Central Bank given that it is very much an energy price base effects story and underlying inflationary pressures currently remain depressed," said Howard Archer of IHS Global Insight.
BNP Paribas economist Clemente De Lucia said the price of oil rose by more than $28.85 in the year to December 2009 and that energy price inflation accounted for about 10 per cent of headline inflation. "Even though confidence indicators have increased over recent months, firms' selling price expectations did not report a similar trend," he added.
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