Consumer prices soared by 5.1pc up in the year to January, up from 5pc in December, according to Eurostat’s first estimates. Economists had forecast a slowdown to 4.4pc.
The rise was spurred by higher food and energy costs, which left the rate of inflation more than two-and-a-half times higher than the ECB’s 2pc target. Energy prices were 28.6pc higher, while unprocessed food cost 5.2pc more.
With those volatile components stripped out, core inflation stood at 2.3pc, down from 2.6pc the previous month. Officials watch this measure as a better indicator of medium-term inflation.
They provide a difficult backdrop as officials prepare to meet in Frankfurt on Thusday to decide on the course of eurozone monetary policy. Ms Lagarde has repeatedly said that high levels of price growth will fade as energy costs come back to normal and global supply chain issues fade.
The ECB has laid out plans to move less speedily than the Bank of England and US Federal Reserve to cut back on its ultra-loose monetary policy stance.
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In December, it set out an aim to cut asset purchases to €20bn a month by October, but members of its governing council have said they do not expect to increase rates this year.
Markets think differently, however, and are pricing in three ECB rate rises in 2022, two fewer than the five increases expected from Threadneedle Street and the Fed. Increasing interest rates raises the cost of borrowing, with the aim of curbing inflation.
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