Eurozone inflation fell lower than many economists forecast in February, fuelling expectations the European Central Financial institution will elevate rates of interest a number of extra occasions this yr.
Client value development eased barely to eight.5 per cent within the yr to February, from 8.6 per cent in January, as costs for companies, items and meals rose quicker though power value development slowed. Economists polled by Reuters had anticipated the determine to fall to eight.2 per cent.
Core inflation, which central bankers watch intently because it excludes power and meals costs to offer a clearer image of underlying pressures, rose to a brand new eurozone file of 5.6 per cent, up from 5.3 per cent within the earlier month.
ECB president Christine Lagarde mentioned on Thursday that whereas inflation was more likely to have risen “a bit of bit” in February, it was on monitor to fall “way more” in March, as a result of base results of year-on-year comparisons with final yr’s excessive power costs.
The ECB has raised charges by 3 proportion factors for the reason that summer season and has signalled it intends to boost borrowing prices by an additional half-point this month.
Lagarde informed Spanish TV station Antena 3 that rising meals costs meant the downward path of inflation wouldn’t be regular and extra price rises could also be wanted after March.
Monetary markets are pricing in a bounce within the ECB’s deposit price to 4 per cent later this yr, up from the present 2.5 per cent. That might overtake the 2001 peak of three.75 per cent, when the ECB was nonetheless making an attempt to shore up the worth of the newly launched euro.