Eurozone inflation rose to 1.1% in December, the highest level for more than three years, boosted by rising oil prices, according to EU figures issued on Wednesday.
The inflation figure was nearly double the 0.6% in November and edging inflation closer to the European Central Bank’s target of 2.0% as a fragile economic recovery continues.
Analysts surveyed by financial services provider Factset had predicted 1.0% inflation for the eurozone, the 19-country area that uses the European single currency.
The last time inflation was at this level was in September 2013, said EU statistics agency Eurostat.
Analyst Howard Archer said the 1.1% figure for December 2016 was “more than originally expected but perhaps less than suspected after German inflation jumped to 1.7%.” Energy inflation was at 2.5% but core inflation — stripped of food and oil prices — edged up only to 0.9% from 0.8% in November, Archer noted.
The latest figure was boosted sharply by the rise in energy prices triggered by Opec’s December decision to cut output.
The eurozone’s low inflation rate has been a great worry for the ECB, which aims to keep it near 2.0%.
Inflation is closely watched as it reflects underlying consumer demand in the economy and is a key sign of whether the eurozone is headed for a full-fledged recovery.
ECB chief Mario Draghi has said inflation would reach its target level by 2018 or 2019.