Brussels, Feb 3 (IANS): The Eurozone's annual inflation rate climbed to 2.5 per cent in January, up from 2.4 per cent in December 2024, according to a flash estimate released by Eurostat on Monday.

Services are expected to record the highest annual inflation rate of 3.9 per cent, down from 4 per cent in the previous month. Inflation for food, alcohol, and tobacco stood at 2.3 per cent, lower than 2.6 per cent in December.

Energy prices registered a sharp rise in annual inflation, increasing from 0.1 per cent in December to 1.8 per cent in January, while non-energy industrial goods inflation remained stable at 0.5 per cent.

Among eurozone members, Croatia recorded the highest inflation rates at 5 per cent, followed by Belgium at 4.4 per cent and Slovakia at 4.1 per cent.

The main EU economies registered the following inflation rates in January: Germany at 2.8 per cent, France at 1.8 per cent, Italy at 1.7 per cent, and Spain at 2.9 per cent.

"Inflation rose from 2.4 per cent to 2.5 per cent in January, marking the fourth consecutive increase for the Eurozone," said Bert Colijn, ING's chief economist of the Netherlands.

While inflation is expected to moderate over the year, Colijn cautioned that risks remain, including rising energy costs and the potential for a tariff dispute between the United States and the European Union, Xinhua news agency reported.

Last week, the European Central Bank (ECB) announced a 25-basis-point interest rate cut in response to sluggish economic data in the eurozone. The decision was based on "an updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission," the ECB said in a press release.