Global inflation continues to concern economic policymakers as 2024 draws to a close. Several major economies now display an inflation rate of 2.7%, a level reflecting persistent price pressures that complicates central banks’ monetary policy strategies. This situation creates a precarious balance between the need to support economic growth and the imperative to control rising prices.
United States: A Worrying Acceleration
In the United States, the inflation rate reached 2.7% in November 2024, marking an acceleration from the 2.6% recorded in October. This increase, although anticipated by financial markets, represents the highest level since July 2024. On a monthly basis, consumer prices increased by 0.3% in November, compared to 0.2% the previous month.
The main factors behind this increase include rising food prices, which increased by 0.4% over the month, marking the strongest monthly increase since January 2023. The housing sector also remains a major contributor to inflation, although its relative weight decreased slightly in November, representing nearly 40% of the total increase, down from over 50% in previous months.
Energy also saw its first increase in six months, with a progression of 0.2%. More concerning still, core inflation, which excludes volatile food and energy prices, remained stable at 3.3% year-over-year and 0.3% month-over-month, a level still well above the Federal Reserve’s 2% target.
Eurozone: A Progressive and Persistent Rise
In the eurozone, inflation also progressed to reach 2.4% in December 2024, up from 2.2% in November, in line with economists’ forecasts. This increase marks the third consecutive month of accelerating inflation in the region. Core inflation, which excludes energy and food, remained at 2.7% for the fourth consecutive month.
Services remain the main driver of inflation, with a rate of 4% in December, slightly up from 3.9% in November. Food, alcohol, and tobacco prices contributed 2.6% to annual inflation. Energy, after experiencing significant declines for several months, showed an almost zero contribution to inflation (+0.1%), marking an important turning point in price dynamics.
Within the European Union as a whole, inflation reached 2.7% in December 2024, up from 2.5% in November. Disparities remain significant between member states, with Romania recording the highest rate (5.5%) and Ireland the lowest (1.0%).
Contrasting Situations Worldwide
Canada presents a slightly different picture with an inflation rate that held at 2.2% in November 2025, stable compared to October. This stability is explained by a more moderate increase in service prices and a decline in organized travel and tourist accommodation prices. However, some categories show persistent tensions. In-store food prices increased by 4.7% year-over-year, the fastest pace since late 2023.
Switzerland continues to stand out with a significantly lower inflation rate. In December 2024, the consumer price index (CPI) recorded a 0.6% year-over-year increase, after falling 0.1% month-over-month. Average annual inflation settled at 1.1% for all of 2024, a clear improvement from 2.1% in 2023.
France saw inflation moderate significantly to reach 1.3% in December 2024, stable compared to November. Month-over-month, prices increased by 0.2%, mainly due to rising service prices, particularly in transportation, and energy products. The slight rebound in energy prices was offset by a more pronounced decline in manufactured goods prices.
Implications for Monetary Policy
Faced with this persistent 2.7% inflation, the U.S. Federal Reserve finds itself in a particularly delicate position. Despite accelerating inflation, markets widely anticipated a 25 basis point rate cut at the December 2024 meeting, which would bring rates to a range of 4.25% to 4.50%.
Fed Chair Jerome Powell acknowledged that inflation remains « somewhat elevated » compared to the 2% target, while emphasizing that the central bank « can afford to be a bit more cautious » regarding future rate cuts, given the strength of the American economy.
The European Central Bank (ECB) continues its rate-cutting cycle begun in June 2024, with the deposit rate now set at 2.50% as of March 2025. Despite inflation rising to 2.4%, the ECB indicated that monetary policy is becoming « significantly less restrictive. » Economists anticipate continued rate cuts at a pace of 25 basis points at each meeting until June 2025, which would bring the rate to 2%.
Structural Challenges of Persistent Inflation
The 2.7% inflation observed in several major economies illustrates the difficulty of sustainably bringing prices back to central bank targets. Several factors contribute to this persistence:
Services Pressures: Services inflation remains particularly stubborn, exceeding 3% in many economies. This component, less sensitive to interest rate variations, notably reflects wage pressures and structural rigidities in the labor market.
Base Effects: Comparisons with periods of sharp energy price declines in 2023 create unfavorable base effects that mechanically support inflation in 2024 and early 2025.
Geopolitical Uncertainties: Trade tensions, particularly tariff policies announced by the incoming Trump administration, create risks of medium-term inflation acceleration.
Impact on Purchasing Power: Even moderate inflation gradually erodes household purchasing power. Over a decade, a 2% annual inflation rate reduces the value of money by approximately 20%. Since February 2020, consumer prices have increased by 24.3% in the United States, creating a persistent feeling of purchasing power loss despite recent inflation slowdown.
Outlook and Challenges for 2025
The 2.7% inflation rate represents an intermediate level that reflects progress made since the 2022 peaks, while remaining above central bank targets in most cases. This situation requires delicate calibration of monetary policies, with central banks needing to find the right balance between supporting growth and controlling inflation.
The coming months will be crucial in confirming whether this downward inflation trend can continue or if new inflationary pressures, particularly linked to trade policies and geopolitical tensions, will complicate the return to price stability. Investors and financial markets will closely monitor central bank decisions, which will continue to play a crucial role in shaping the global economy.
