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Inflation rates in Europe continue falling

Annual inflation in the Eurozone (EZ15) amounted to 1.6% in December 2008. One year earlier inflation had amounted to 3.1%. As compared to November prices even fell by on average 0.1% in December 2008. Annual inflation of the EU27 was at 2.2% in December 2008 (December 2007: 3.2%). In the period from November to December last year inflation in the EU27 fell by 0.1%. These figures were published yesterday by the European Statistical Office.

In December 2008 the lowest annual inflation rates were registered in Luxembourg (0.7%), Portugal (0.8%) and Germany (1.1%) and the highest in Latvia (10.4%), Lithuania (8.5%) and Estonia (7.5%). In 24 of the member states annual inflation in December was smaller than that in November. In Malta it amounted to +5.0% in December following -4.9% in November.

The lowest average inflation rates in 2008 were registered in the Netherlands (2.2%), Portugal (2.7%) and Germany (2.8%), while the highest were to be found in Latvia (15.3%), Bulgaria (12.0%) and Lithuania (11.1%).

In December 2008 the main driving factors of annual inflation were housing (3.6%), alcohol and tobacco (3.5%) as well as restaurants and hotels (3.3%). Those factors which curbed inflation were transportation (-2.5%), telecommunication (-1.8%) as well as leisure and culture (0.3%).

The main monthly inflation drivers in December last year were leisure and culture (2.0%), restaurants and hotels (1.0%) as well as foodstuffs (0.2%). On the other hand, inflation was curbed by price reductions in transportation (-1.9%), clothing and shoe ware (-0.8%) as well as housing (-0.7%). GERMAN