Its strong momentum is in part driven by robust growth abroad. But it also reflects improved domestic growth dynamics. This notwithstanding uncertainty remains high. 2. As regards price developments in the euro area, annual HICP inflation has increased to 2.4% in January 2011, largely driven by energy and non-energy commodity prices.
Inflation rates could temporarily increase further in the next few months and are likely to stay above 2% in 2011, before moderating again. There is continued evidence of upward pressure on overall inflation mainly owing to energy and commodity prices.