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Eurozone inflation jumps to highest since 2013

Xinhua, January 31, 2017 Adjust font size:

Annual inflation in the eurozone is expected to be 1.8 percent in January, the highest since February 2013, fueled by a surge in energy prices, a flash estimate from Eurostat, the statistical office of the European Union (EU) showed on Tuesday.

The 1.8 percent annual inflation was up from 1.1 percent in December, reaching the European Central Bank's (ECB) medium-term target of below, but close to 2.0 percent, which is considered most suitable for a healthy economy.

Though higher inflation may hurt consumer spending, it also helped push up wages and stimulate economic activity so as to help economic growth.

The figures are likely to provide relief to policy makers at ECB who have resorted to massive monetary stimulus programs to get inflation up to its target.

But the so-called core inflation, which excludes volatile prices of fuel and food, was stable at 0.9 percent year-on-year in January.

And that's the figure the ECB looks to in its policy decisions, suggesting the central bank won't change its interest rates or other monetary stimulus measures in the near future.

In December, the ECB extended its bond buying program by nine months until the end of 2017, but from April, will buy only 60 billion euros (65 billion U.S. dollars) of bonds a month, rather than 80 billion euros.

ECB officials said they were ready to ramp up purchases again if the growth and inflation outlook darkens. (1 euro = 1.08 U.S. dollars) Enditem