Eurozone inflation drops to 2.7% in December

(BRUSSELS) - Eurozone inflation dropped more than expected in December to 2.7 percent, the first fall in four months but still above the European Central Bank target, official revised figures showed Tuesday.

Eurostat, the European Union's statistics agency, had previously put the annual inflation rate in the 17-nation eurozone at 2.8 percent, down from 3.0 percent in November.

It marked the 13th consecutive month that inflation was above the ECB target for price stability of below or close to 2.0 percent.

In the top German economy, the annual inflation rate in December was 2.2 percent with number two France matching the euro area average while under-pressure Italy much higher at 3.7 percent.

Housing prices were up 4.9 percent, the data showed, with transport costs increasing 4.3 percent as fuel rose.

Eurozone inflation peaked at 3.0 percent in September, remaining at that level through October and November and the current slowdown appears to confirm economist forecasts of lower inflation in 2012.

At its first policy-setting meeting of this year, the ECB held its main interest rate steady at 1.0 percent, as expected, following two straight months of rate cuts.

December 2011 Euro area annual inflation down to 2.7% EU down to 3.0% [Eurostat]