Italy’s 10-year BTP yield was around 3.69%, its highest since early November 2024, in line with other European peers, amid mounting concerns over inflation. Eurozone inflation accelerated to 2.4% last month due to higher energy costs and persistently expensive services, while an ECB survey indicated inflation expectations were rising. Meanwhile, expectations remain that the European Central Bank will cut rates by 25 basis points during its 30 January 2025 meeting, but the path ahead for rate cuts is likely to be more gradual. In parallel, the persistent increase in UK gilt yields is adding further strain.