Core inflation to 'embolden' ECB hawks for interest rate hikes  

Figures show headline annual rate of inflation at 8.6% in January, down from 9.2% in December, but underlying rate hit new high

The European Central Bank has all-but confirmed it will hike interest rates next month and the latest inflation data may embolden the hawks on the governing council. 

Stubbornly-high underlying inflation will likely bolster the hawks at the European Central Bank, even as headline price pressures show an improving picture, economists have warned. 

Revised figures from Eurostat showed that the headline annual rate of inflation, which includes the price of food and energy in its calculations, was running at 8.6% in January, down from 9.2% in December, but that the core or underlying inflation rate hit a new record high.