Europe's inflation is up after months of decline. It could mean a longer wait for interest rate cuts

Inflation is on the rebound in Europe

FRANKFURT, Germany -- Inflation plaguing Europe rose to 2.9% in December, rebounding after seven straight monthly declines. The rise in price levels cast doubt on predictions for speedy interest rate cuts from the European Central Bank.

The figure released Friday was up from the 2.4% annual inflation recorded in November — but is well down from the peak of 10.6% in October 2022.

ECB President Christine Lagarde warned that inflation could tick up in coming months, taking a detour from its recent downward path. The central bank for the 20 European Union countries that use the euro currency has raised its benchmark interest rate to a record-high 4% and says it will keep it there as long as necessary to push inflation down to its goal of 2% considered best for the economy.

The faster-than-expected fall in inflation over the last months of 2023 had led some analysts to predict the central bank would start cutting interest rates as early as March.

The December rebound in inflation supported analysts who are predicting that rates wouldn’t start to come down until June.