Frequency of rising and falling prices in the euro area

Abstract

Euro area inflation accelerated notably in December 2016 and January 2017. This mainly reflected price increases caused by constraints in the supply of energy products and unprocessed food. In fact, the development of core inflation, excluding these items, still remained subdued. In addition, the rate of change in the prices of goods and services included in core inflation has remained slow. Sluggish core inflation and the rigidity of relative prices included therein suggest that euro area inflation is not picking up so as to exceed the price stability objective.