$3.67K
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$3.67K
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This is a market about the variation of consumer prices in the Eurozone over the 12-month period ending December 2025 as reported by Eurostat. This market will resolve according to the number the Harmonised Index of Consumer Prices (HICP) increased by over the 12-month period ending December 2025 (% change) according to the monthly Eurostat report. The resolution source for this market will be the Eurostat Harmonised Index of Consumer Prices monthly report released for December 2025, currently
Prediction markets are pricing in near-certainty that the Eurozone's annual inflation rate will be at or below the European Central Bank's 2% target in December 2025. The leading Polymarket contract, "Will the Eurozone's annual inflation increase by ≤2.0% in December?" is trading at 95 cents, implying a 95% probability. This indicates traders view a sub-2% print as virtually assured, with only a 5% chance of an upside surprise. It is important to note, however, that trading volume is thin at approximately $4,000, which can amplify price movements and reduce market depth.
The extreme confidence stems from a sustained disinflationary trend and aggressive monetary policy. The Eurozone's Harmonised Index of Consumer Prices (HICP) has fallen significantly from its 2022 peak above 10%, with recent prints hovering just above 2%. Markets are betting this trajectory will continue, reinforced by the European Central Bank's current restrictive interest rate stance, which is designed to anchor inflation expectations. Furthermore, weakening economic growth indicators across the bloc are seen as reducing underlying price pressures, making a reacceleration back above target unlikely by year-end 2025.
The primary risk to this consensus is a resurgence in energy or food price shocks, which have previously caused volatile inflation spikes. Geopolitical tensions affecting global supply chains or a sudden shift in the ECB's policy toward earlier or more rapid rate cuts could also alter the inflation path. The market will be highly sensitive to the monthly inflation prints leading up to December 2025, especially any consistent readings above 2.0%. The immediate catalyst is the official Eurostat HICP report for December 2025, which will definitively resolve this market. Given the low liquidity, any surprising economic data in the coming months could cause significant price swings in this contract despite the current high confidence.
AI-generated analysis based on market data. Not financial advice.
The December Inflation Eurozone - Annual prediction market focuses on forecasting the year-over-year percentage change in consumer prices across the 20 member states of the Eurozone for the 12-month period ending in December 2025. This figure, officially known as the Harmonised Index of Consumer Prices (HICP) inflation rate, is the European Union's standardized measure of inflation, designed to allow consistent comparisons across countries. It is calculated and published monthly by Eurostat, the statistical office of the European Union. The market resolves based on the final figure released in Eurostat's monthly HICP flash estimate and subsequent detailed report for December 2025. This specific forecast is a critical economic indicator watched by central bankers, financial markets, policymakers, and businesses as it signals the trajectory of price stability in the world's second-largest currency union. Interest in this prediction stems from its direct implications for monetary policy set by the European Central Bank (ECB), particularly decisions on interest rates. After a period of historically high inflation following the COVID-19 pandemic and the energy crisis triggered by the war in Ukraine, the path of inflation towards the ECB's 2% target is a central economic question. The December 2025 reading will serve as a crucial benchmark for assessing whether the ECB has successfully guided inflation back to its target, influencing everything from mortgage rates and corporate borrowing costs to wage negotiations and government budget planning. Analysts scrutinize components like energy, food, and core inflation (which excludes volatile energy and food prices) to understand underlying price pressures.
Eurozone inflation has experienced dramatic shifts in recent years, providing essential context for the December 2025 forecast. For most of the 2010s, the region grappled with persistently low inflation, often below the ECB's target, prompting unconventional monetary policies like negative interest rates and large-scale asset purchases. This paradigm shifted violently in 2021. As economies reopened from COVID-19 lockdowns, supply chain bottlenecks and surging energy demand pushed prices higher. The situation escalated following Russia's full-scale invasion of Ukraine in February 2022, which triggered an unprecedented energy price shock. Eurozone HICP inflation peaked at 10.6% in October 2022, a record high since the introduction of the euro. In response, the ECB initiated its first interest rate hike in over a decade in July 2022, embarking on its most aggressive tightening cycle. By September 2023, the ECB had raised its key deposit facility rate from -0.5% to 4.0%. This forceful action, combined with easing energy prices, began to bring inflation down. The December 2023 annual inflation rate was 2.9%, a significant decline from its peak but still above target. The path since then has been bumpy, with fluctuations in energy and stubbornly high services inflation keeping the ECB cautious. The forecast for December 2025 represents a point far enough along this disinflationary path to judge its ultimate success or failure.
The December 2025 Eurozone inflation rate matters profoundly because it is a key determinant of living standards, economic stability, and political cohesion. For households, the rate directly impacts the real value of wages and savings, influencing purchasing power and financial security. Persistently high inflation erodes consumer confidence and can lead to social unrest, while deflation can trigger delayed spending and economic stagnation. For the European Central Bank, this figure is the ultimate report card on its primary mandate of price stability. A result close to 2% would validate its policy decisions and likely allow for an easing of restrictive interest rates, stimulating investment and growth. A result significantly above target could force the ECB to maintain or even tighten policy, risking a deeper economic slowdown. Financially, the inflation outcome sets benchmark pricing for trillions of euros in debt, derivatives, and pension fund liabilities. It also has significant political ramifications, as public sentiment on the economy influences elections across Europe. Governments face pressure to adjust tax brackets, social benefits, and minimum wages based on inflation, making this a central concern for fiscal policy and social equity.
As of mid-2024, Eurozone inflation has declined significantly from its 2022 peak but remains in a 'last mile' phase where progress towards the 2% target has slowed. The headline HICP rate hovered around 2.4-2.6% in the first half of 2024, while core inflation remained more stubborn, around 2.7-2.9%. The ECB began a cautious rate-cutting cycle in June 2024, lowering its deposit rate by 25 basis points, signaling increased confidence in the disinflation process but emphasizing a data-dependent approach. The future path remains uncertain, with risks including potential renewed energy price volatility, sustained high wage growth, and the delayed effects of geopolitical tensions on supply chains. Market participants and ECB watchers are intensely focused on incoming data on wages, corporate profit margins, and services prices to gauge the likelihood of inflation settling at target by the end of 2025.
The Harmonised Index of Consumer Prices (HICP) is the standardized measure used for international comparison across all EU countries, including the Eurozone. National Consumer Price Index (CPI) measures may use slightly different methodologies and baskets of goods. For Eurozone policy, the HICP is the official benchmark.
The ECB primarily controls inflation by setting key interest rates. Raising interest rates makes borrowing more expensive, which cools economic demand and helps reduce price pressures. It can also use other tools like adjusting its balance sheet by reducing bond holdings, which tightens financial conditions.
Inflation can be caused by demand-pull factors (too much money chasing too few goods), cost-push factors (rising costs for energy, wages, or imported goods), and inflationary expectations. The recent surge was initially driven by supply chain issues and then a massive energy cost shock, later spreading to services and core goods.
Eurostat is expected to release the initial flash estimate for December 2025 HICP around January 6, 2026. The final detailed report, which is the definitive resolution source for this market, will be published approximately two weeks later, around January 17-20, 2026.
Core inflation, which excludes volatile food and energy prices, is important because it provides a clearer signal of underlying, domestic inflationary pressures driven by factors like wages and services demand. It is considered a better indicator of medium-term inflation trends than the headline rate.
Educational content is AI-generated and sourced from Wikipedia. It should not be considered financial advice.
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| Market | Platform | Price |
|---|---|---|
| Poly | 95% |
| Poly | 4% |
| Poly | 1% |
| Poly | 0% |
| Poly | 0% |
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