The euro area inflation indeed started to incline and as Trichet signaled yesterday in the press conference following the rate decision, price pressures are rising and increasing over short term basis due to oil prices volatility which tilted the pressure to the upside.

Consumer prices rose 0.6% in December inline with expectations following 0.1% rise in November, and on the year the flash estimate was unrevised at 2.2% from a revised 1.9%. Core CPI inflation remains subdued and steady as expected at 1.1% on the year.