The annual inflation rate in the Euro Area rose for the third consecutive month, reaching 2.4% in December 2024, its highest level since July. This marks an increase from 2.2% in November and aligns with market expectations and preliminary estimates. The rise was primarily attributed to base effects, as last year’s steep declines in energy prices no longer impact the annual rate. Energy costs rebounded (0.1% from -2% in November) for the first positive change since July, while inflation for services edged higher (4% from 3.9%). In contrast, inflation slowed slightly for food, alcohol, and tobacco, as faster price growth in processed items (2.9% from 2.8%) was offset by a slowdown in unprocessed food prices (1.6% from 2.3%). Among member states, inflation rose in Germany (2.8% from 2.4%) and France (1.8% from 1.7%) but eased in Italy (1.4% from 1.5%). Core inflation remained steady at 2.7%, while the European Central Bank anticipates inflation returning to the 2% target by year-end.