Core inflation, which excludes volatile food and energy prices, rose by 3.3% year-on-year, surpassing market expectations of a 3.1% increase. This was largely driven by higher inflation in the services sector.

The strong labor market in the services sector and slightly growing domestic demand have contributed to an increase in demand for goods and services. This, in turn, has directly led to a modest rise in market prices.

However, this increase in inflation comes after a decision to cut interest rates by another 25 basis points on the 7th of this month. The central bank continues to adopt a cautious tone regarding future rate cuts, aiming to sustainably bring inflation back to the 2% target.

Source: Fxstreet