Euro zone inflation revised down to 0.3 percent in January

BRUSSELS (Reuters) - Euro zone consumer prices grew 0.3 percent year-on-year in January, the European Union's statistics office said on Thursday, revising downward its earlier estimate of a 0.4 percent rise.

The annual inflation figure for January was below expectations. Economists polled by Reuters had forecast an increase of 0.4 percent.

Inflation is however slightly accelerating compared to December, when prices in the 19 countries sharing the euro rose 0.2 percent.

On a monthly basis, prices in the euro zone dropped in January by 1.4 percent, as expected.

Excluding the volatile prices of unprocessed food and fuel, or what the European Central Bank calls core inflation, prices increased in January by 1.0 percent, in line with forecasts and more than the 0.9 percent rise recorded in December.

The new figures add to the ECB's policy headaches. The European Central Bank wants to keep headline inflation below, but close to, 2 percent and has been buying billions of euros of euro zone government bonds to inject more cash into the economy and accelerate price growth.

Energy prices were confirmed as the main drag on euro zone inflation. They dropped 5.4 percent in January on a yearly basis, more than the 5.3 percent decrease previously estimated by Eurostat.

The drop in energy prices, driven by plummeting oil prices, is however slowing down from the 5.8 percent decrease recorded in December, a downward trend started in October.

Unprocessed food was the main factor driving prices up in the euro zone, marking an annual 1.4 percent increase, which was however lower than the 1.8 percent rise earlier estimated by Eurostat. In December, unprocessed food prices increased by 2.0 percent.

(Reporting by Francesco Guarascio; Editing by Alastair Macdonald)

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