Euro zone inflation rebounds in December, fueling rate-cut debates

Headline inflation in the euro zone jumped to 2.9% in December, up from 2.4% the previous month, though core inflation continued to ease.

The annual print was a little lower than the 3% forecast in a Reuters poll of economists.

Core inflation — which doesn’t include energy, food, alcohol and tobacco prices — cooled from 3.6% in November to 3.4% last month.

An overall rise was expected due to base effects from the energy market, as price falls moderate. Energy prices were down 6.7% year-on-year in December, versus a 11.5% fall in November.

Friday’s data will add to the debate over the trajectory of the European Central Bank’s policymaking, with markets expecting rate cuts to begin before the summer.

The ECB, however, has stressed that risks remain to its inflationary outlook from wage pressures and geopolitical volatility.

Thi sis a breaking news story and will be updated shortly.