Inflation eased swiftly and sharply in the eurozone last month, as skyrocketing energy costs declined amid a broad European conservation effort, but prices for many goods continued to climb and policymakers are expected to raise interest rates this week, the New York Times reported. Consumer prices in countries that use the euro rose at an 8.5 percent annual rate in January, down from 9.2 percent in December and well below double-digit increases in autumn, according to a European Commission estimate released Wednesday. It was the third monthly decline since the inflation rate hit 10.6 percent in October. The report was the latest signal that inflation in Europe is starting to cool meaningfully, and it buttressed expectations that the European economy might be able to avoid a deep and painful recession forecast by economists just a couple of months ago. Overall inflation peaked late last year “and will continue to ease throughout 2023,” Oxford Economics, a London think tank, said of the report. Efforts by European governments to shield consumers and businesses from higher energy bills “will aid in disinflation as well,” the group said. But Wednesday’s data also showed that core inflation, a measure that strips out volatile categories like energy and food, held steady in January, at a 5.2 percent annual pace. Core inflation, which includes services and durable goods, like cars and household appliances, is closely watched by policymakers because it is a signal that price rises are becoming embedded in the economy.
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