The annual readings might show that inflation came in slightly higher than that in December, stopping the declining trend, but I would say that the core reading is the one markets should be paying attention to. In January, that figure jumped to 7.5% y/y and is up from the 7.0% y/y figure last month.
That's yet another blow to those hoping that inflation would be coming down in Europe and as long as core inflation continues to hold higher, it will vindicate a more hawkish stance by the ECB.
We'll see if other countries in the region follow a similar trend but if Spain is any indication, most likely that will certainly be the case.
