February 2, 2018 / 10:12 AM / 21 days ago

Euro zone producer prices limited by reduced energy cost rise

BRUSSELS, Feb 2 (Reuters) - Euro zone producer prices rose less than expected in December, slightly undershooting market expectations because of a sharp slowdown in the rise of energy prices, data from the European Union’s statistics office Eurostat showed on Friday.

Eurostat said prices at factory gates rose only 0.2 percent month-on-month in December, slowing from a 0.6 percent increase in November.

Economists polled by Reuters had expected a monthly rise of 0.3 percent. Energy price growth in the month slowed to just 0.1 percent from 2.3 percent in November.

Year-on-year, producer prices rose 2.2 percent in the last month of 2017, slowing from 2.8 percent the month before and falling short of market expectations of a 2.3 percent rise.

Unless cushioned by intermediaries and retailers, producer prices are usually transmitted to consumers and are the key influence on headline inflation that the European Central Bank wants to keep below, but close to 2 percent.

Consumer inflation slowed to 1.3 percent year-on-year in January from 1.4 percent in December and 1.5 percent in November, mainly because of a sharp slowdown in energy price rises. (Reporting By Jan Strupczewski; editing by Philip Blenkinsop)

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