World
Eurozone inflation rose to 2.9% in December according to Eurostat
The half percentage point rise on the November figure (2.4%) appeared driven by an abatement in falling energy prices
Food, alcohol and tobacco were expected to continue with the highest inflation rate in December (6.1%, compared with 6.9% in November), followed by services (4.0%, stable compared with November). But a diminution in energy inflation abated from -11.5% in November to -6.7% in December.
The news is likely to damp hopes of an early interest rate decrease by the European Central Bank in 2024. The bank’s rate stands unchanged from last October at 4%, following steady increases which began in July 2022.
Christine Lagarde, the president of the ECB, voiced concerns late last year that she expected inflation to rise again as subsidies on energy prices were removed. She said last November that it won’t be before the “next couple of quarters” that the ECB will start to cut rates.
Zsolt Darvas, a senior fellow at the Brussels-based think-tank Bruegel, said the rise was in line with expectations since energy prices “very much influence the overall headline inflation rate e-books.”
Of so-called core inflation – which excludes food and energy prices – Darvas said “the important news is that there was a marginal, a very small decline”, from 3.6% in November to 3.4% in December.
“I think this is the more important news because this reflects the underlying developments of inflation. So it could be that headline inflation might rise a little bit in the coming months. But what the ECB policymakers watch for is how the core inflation will evolve.”
However, Darvas pointed out that the 3.4% core inflation rate remains adrift of the ECB’s 2% inflation target of the European Central Bank.
With wage growth accelerating and inflation broadly slowing, consumer purchasing power is increasing, according to Darvas, which might imply demand pressure, in turn making higher inflation stubborn.
“That’s why I would expect that the ECB will not stop cutting interest rates anytime soon,” Darvas said, adding: “My expectation is that the European Central Bank will keep its current interest rates for many, many additional months because core inflation is still well above the target of 2%.”
Darvas also pointed to escalation of the Middle East conflict as a risk particularly for global global oil and energy prices. Such an escalation “would have an impact all around the world, including in Europe and the eurozone. And that could keep inflation pressure higher for longer.”
Social media posts have showed French border guards stationed in airport arrivals with signs that appear to read, “to all the influencers and other people in tax havens such as Dubai, the tax authorities wish you a smooth return to France”. But is this real?
World
Iran continues firing missiles, drones at neighboring states, with multiple interceptions reported
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Iran launched a new wave of attacks on Thursday, with explosions reported in the region and Tehran threatening that the U.S. would “bitterly regret” sinking an Iranian warship.
Iran’s strikes on Thursday targeted Israel, American bases and countries in the region. Israel announced multiple incoming missile attacks as air raid sirens blared in Tel Aviv and Jerusalem.
Azerbaijan’s Ministry of Defense on Thursday said Iran used unmanned aerial vehicles (UAVs) in an attack on Nakhchivan International Airport and other civilian infrastructure. The ministry said the details of the attack and the capabilities of the UAVs were being investigated.
“The Ministry of Defense of the Republic of Azerbaijan strongly condemns the attacks carried out by the armed forces of the Islamic Republic of Iran against civilian infrastructure on the territory of Azerbaijan in the absence of any military necessity. The Islamic Republic of Iran bears the entire responsibility for the incident,” the ministry’s statement read.
Explosions seen and heard in Azerbaijan as Iran launches retaliatory attacks across the Middle East. (East2West)
Iran has not acknowledged targeting Azerbaijan, despite the country’s ministry of defense pointing the finger at Tehran.
Qatar evacuated residents near the U.S. Embassy in Doha on Thursday, with its Ministry of Defense confirming that the country was “subjected to a missile attack” and that its air defense systems were able to intercept it. The ministry urged the public to remain calm and avoid unofficial information.
Abu Dhabi announced that its authorities were responding to an incident involving falling debris in ICAD 2, which is part of the Industrial City of Abu Dhabi. Six people, identified by Abu Dhabi as Pakistani and Nepali nationals, suffered minor to moderate injuries.
A plume of smoke rises over buildings in Doha, Qatar, on March 5, 2026. (Mahmud Hams/AFP via Getty Images)
FORMER TOPGUN PILOT DECLARES IRAN MILITARY ‘OVER WITH’ AMID US AIR SUPERIORITY, BUT WARNS OF ANOTHER DANGER
Iran has carried out retaliatory strikes since the launch of Operation Epic Fury, with the latest wave coming one day after the U.S. sunk an Iranian warship, killing at least 87 Iranian sailors. Sri Lankan navy spokesman Cmdr. Buddhika Sampath said 32 people were rescued from the wreck and were admitted to a hospital.
Secretary of War Pete Hegseth defended the move during a news briefing at the Pentagon.
“An American submarine sunk an Iranian warship that thought it was safe in international waters. Instead, it was sunk by a torpedo — Quiet Death. The first sinking of an enemy ship by a torpedo since World War II. Like in that war, back when we were still the War Department, we are fighting to win,” Hegseth said.
Missile interceptions are seen in the sky on March 5, 2026, in Central Israel. (Alexi J. Rosenfeld/Getty Images)
ISRAEL’S MILITARY RELEASES VIDEO SHOWING OBLITERATION OF IRAN’S MISSILE LAUNCHERS, DEFENSE SYSTEMS
Iranian leaders condemned the attack, with Foreign Minister Abbas Araghchi accusing the U.S. Navy of committing “an atrocity at sea.” Meanwhile, Ayatollah Abdollah Javadi Amoli appeared on state television and called for the shedding of Israeli and “Trump’s blood.”
“Fight the oppressive America, his blood is on my shoulders,” he said in a rare call for violence from an ayatollah, one of the highest ranks within the clergy of Shiite Islam.
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The U.S. and Israel launched the war on Saturday with strikes targeting Iran’s leadership, including the supreme leader, Ayatollah Ali Khamenei, who was killed. Iran’s missile arsenal and nuclear facilities were also hit.
The Associated Press contributed to this report.
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