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01.03.2024

Eurozone annual inflation decreased last month

Preliminary data published by Eurostat showed that the eurozone annual inflation slowed again in February, but was higher than economists' forecasts. Core inflation reached its lowest level since March 2022, but also exceeded consensus estimates, which is likely boosting the ECB's argument that rate cuts should not be rushed. ECB's policymakers meet next week, and are expected to once again leave their key rate unchanged, but might give more guidance on the timing of a first rate cut. Markets now see around 90 basis points of rate cuts this year with the first move coming in June.

According to the report, the consumer price index rose by 2.6% per year after rising by 2.8% per year in January. Economists had expected an increase of 2.5%. Meanwhile, on a monthly basis, the consumer price index rose by 0.6%, offsetting the January decline (-0.4%).

Eurostat reported that the core consumer price index - energy, food, alcohol & tobacco - rose by 3.1% per year after an increase of 3.3% per year in January. Economists had expected an increase of 2.9% per annum.

The data showed that the annual growth of the overall consumer price index was due to an increase in the cost of food, alcohol & tobacco (+4.0% compared with +5.6% in January), services (+3.9% vs. +4.0%) and non-energy industrial goods (+1.6% vs. +2.0%). Meanwhile, energy prices fell by 3.7% per annum after declining by 6.1% per annum in January.

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