According to a report published on Thursday by Eurostat, the EU's statistics office, Belgium's inflation rate fell to 7.4% last month: the third consecutive decrease, after peaking at 13.1% in October last year. The latest data indicates that Belgium's inflation rate is now well below the eurozone average of 8.6%, as well as the broader EU average of 10.0%.
Among EU countries, Hungary recorded the highest inflation rate (26.2%), followed by Latvia (21.4%) and the Czech Republic (19.1%). Luxembourg (5.8%), Spain (5.9%), and Cyprus and Malta (6.8%) registered the lowest inflation rates.
The report noted that the driving factors of eurozone inflation are food, alcohol, and tobacco (which together added 2.94 percentage points to headline inflation). Second was energy (2.17 percentage points), and then services (1.80 percentage points). Rising prices for non-energy industrial goods also made a significant contribution (1.73 percentage points).
A complementary analysis
Eurostat's latest study corroborates another recent report by Statbel, Belgium's statistics office, which similarly found that Belgium's inflation rate fell to 7.4% last month.
However, Statbel further noted that Belgium's core inflation – which strips out the impact of energy and unprocessed food prices – increased considerably, rising from 7.1% in December to 8.2% in January.
Moreover, Belgium's core inflation – which has risen steadily since March last year – is now well above the average core eurozone rate of 5.3%: the highest rate ever recorded, l'Echo reports.
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Rising inflation makes it highly likely that central banks will also raise interest rates to drive down price growth over the coming months. In a recent interview with Italian newspaper La Stampa, Klaas Knot, a member of the Governing Council of the ECB, stated that rising inflation will see the ECB "continue to be in tightening mode until the summer".
He added: "In the December data, we saw a first decline in headline inflation, but that was entirely due to base effects and lower energy inflation. When we focus on core inflation, unfortunately it's not good news; it is still on the rise. Underlying inflationary pressures show no signs of abating yet."