Inflation in the Eurozone unexpectedly reaches a new High Record.

FRANKFURT – Eurozone inflation jumped to a new record high last month, surprising forecasts for a large decline and adding to already widespread scepticism that price pressures are as benign and fleeting as the European Central Bank continues to believe.

In the 19-country eurozone, inflation rose to 5.1 percent in January from 5 percent in December, much above predictions for a decline to 4.4 percent, according to the European Union’s statistics office Eurostat on Wednesday.

Inflation was driven by rising energy prices, but food prices also rose, while inflation in services and industrial products remained uncomfortably high.

Price increase is more than double the ECB’s objective of 2%, but the central bank, which hosts a policy meeting on Thursday, has dismissed the statistics for months, claiming that transitory factors are to blame and that inflation will subside on its own.

However, the ECB’s track record in projecting inflation is inconsistent, and it was compelled to drastically boost its estimates multiple times last year.

While the Federal Reserve of the United States has abandoned the notion that inflation is “transitory,” the European Central Bank has maintained this judgement, stating that wage growth, a need for long-term inflation, is subdued and underlying price increases is feeble.

Despite a slowing in core inflation, it remained above the ECB’s objective and outperformed market forecasts by a significant margin.

The ECB regularly monitors inflation excluding food and fuel costs, which fell to 2.5 percent from 2.7 percent, while a tighter measure that also excludes alcohol and tobacco items slowed to 2.3 percent from 2.6 percent. Both results were significantly higher than expected.

The ECB expects inflation to fall down below 2% by the end of the year, owing in part to poor wage growth, but a lengthy list of important officials has questioned this storey, warning that risks are skewed toward higher levels.

While pay growth has been slow thus far, unemployment fell to 7% in December, an all-time low for the eurozone, and is already well below the ECB’s own estimates, implying that wage pressures may surpass projections as well.

After expanding support through a complicated package in December, ECB officials gathering on Thursday are largely set to maintain policy unchanged.

While ECB President Christine Lagarde may agree that pricing pressures continue to outperform forecasts, she is also anticipated to push down on rising rate rise expectations, maintaining her long-held position that any rate adjustments this year are improbable.