Eurozone inflation falls to 2.6% in February, but it will not help the ECB to make a move with rate cuts
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Inflation continued to ease in the eurozone in February. The Consumer Price Index (CPI) of the euro economies slowed down from year-on-year growth 2.8% in January to 2.6% last month, according to data published this Friday by Eurostat. Although the reading is the lowest since the 2.4% recorded in November, it exceeds the 2.5% that analysts predicted. For his part, the Underlying CPI (excluding energy, food, alcohol and tobacco), go back from 3.3% to 3.1%, the lowest figure since March 2022. As with the general rate, the decrease is less than anticipated by the consensus of economists, who were betting on 2.9%. This slowdown is softer than expected underpins the calm that the European Central Bank is showing (ECB) in the face of possible interest rate cuts.
The first two European inflation data released this Thursday confirmed the trend of disinflation, although varying in speed. The data of Francepublished first, showed a slowdown in the CPI from 3.1% year-on-year to 2.9% in February, above the 2.7% expected by economists. Although a modest decrease was expected due to the withdrawal of household support measures on the electricity bill, the smaller-than-expected deceleration confirms that the path will be quite progressive. In Spain, The slowdown in the CPI from 3.4% to 2.8% in February was in line with forecasts. The underlying rate (without fresh food or energy) fell two tenths to 3.4%.
But the data that was most expected was that of Germany, where inflation fell in February more than expected: from 2.9% to 2.5%. However, this was only due to much weaker food price inflation. The core inflation rate, which excludes the often highly volatile energy and food prices, stood at 3.4%, the same as the previous month. This has been reflected in this Friday’s European data.
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