Annual inflation down in Euro to 1.4%, could extend QE.

As Eurostat released the latest estimations on the Euro area annual inflation is expected to be 1.4% in December 2017, down from 1.5% in November 2017, justifying the European Central Bank’s decision to keep its policy easy despite growing pressure from Germany and other richer eurozone countries.

Looking at the main components of euro area inflation according to Eurostat’s flash estimate, energy is expected to have the highest annual rate in December (3.0%, compared with 4.7% in November), followed by food, alcohol & tobacco (2.1%, compared with 2.2% in November), services (1.2%, stable compared with November) and non-energy industrial goods (0.5%, compared with 0.4% in November).

As for Mario Draghi, he has said that ECB would keep up buying bonds at least until September and keep rates low well after to raise inflation to its two percent target, while Germany and the Netherlands along with other northern countries have voiced their worries about keeping up with this policy as economic growth is robust.

As a stronger-than-expected German inflation reading of 1.6 percent last week raised market speculation about an upside surprise in eurozone price growth on Friday, but as price growth weakens to in December, means ECB has difficult work in analyzing data and judging when to pull back on quantitative easing (QE), while numbers stick below the 2 percent target.