Euro zone inflation hits 2% in December, in line with forecasts

Group 1 - Euro zone inflation stood at 2% in December, aligning with the European Central Bank's (ECB) target, down from 2.1% in November [1] - Core inflation, excluding volatile prices, decreased to 2.3% in December from 2.4% in November, while services inflation fell to 3.4% from 3.5% [2] - The ECB maintained its key deposit facility rate at 2% for the fourth consecutive time in December, with the last rate cut occurring in June [2] Group 2 - The ECB's rate-cutting cycle has reduced rates from a record high of 4% in 2024, with indications that the easing cycle may be nearing its end [3] - Following the inflation data release, the euro and Stoxx 600 remained unchanged, but the return to the ECB's target could indicate potential future rate cuts [4] - Analysts suggest that the current inflation levels provide the ECB with justification to consider further interest rate cuts in 2026, although the recent changes are viewed as minor [5][6]