Inflation Rebounds in Germany and France, Tempering Hopes for Imminent ECB Rate Cuts
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Annual inflation rose in Germany and France in December, reversing a declining trend since April. This could temper expectations that the ECB will cut interest rates soon.
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Energy prices helped drive the inflation increases as governments unwind energy crisis subsidies from 2022.
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Economists expect eurozone core inflation to keep slowing, reflecting easing price pressures.
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Recent inflation data has dampened investor excitement about near-term rate cuts from central banks.
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For the ECB, the inflation pickup strengthens the case for a steady policy hand rather than rushing into rate cuts.