Euro-Area Inflation to Indicate Increases May Have Peaked

Euro-area inflation figures for December due this week are likely to indicate price increases may have peaked. The rate should drop more significantly at the start of this year, as the effect of a temporary cut in Germany’s value-added tax falls out of the annual comparison. Bloomberg Economics also doesn’t anticipate the steep rise in road fuel costs seen in January to March of 2021 to be repeated in the first three months of 2022.

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