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Euro Zone Inflation: Difference between revisions
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== Developments == | == Developments == | ||
March 31, 2023: Euro zone headline inflation dropped to 6.9% in March from 8.5% in February-the biggest deceleration ever and below the 7.1% estimate. However, core inflation rose slightly to 5.7% from 5.6% in February, in-line with expectations.The drop in headline inflation was mainly contributed by the 0.9% drop in energy prices. This shows that core inflation remains sticky as noted by ECB Member Isabel Schnabel on Thursday. Chief economist Philip Lane recently said that more rate hikes are needed to bring down inflation<ref>https://www.cnbc.com/2023/03/31/inflation-euro-zone-dropped-march-but-the-ecb-rate-hike-path-is-unclear.html#:~:text=Europe%20Economy-,Euro%20zone%20price%20rises%20cool%20significantly%20in%20March,core%20inflation%20hits%20record%20high&text=The%20main%20reason%20behind%20the,cycle%2C%20which%20started%20in%20July.</ref>. | |||
March 2, 2023: Euro zone inflation moderated slightly in February but was above expectations. Headline inflation in the Euro Zone declined to 8.5% in February from 8.6% in January. Economists polled by Reuters were expecting it to drop to 8.2%. Meanwhile, core inflation rose to 5.6% from 5.3% in January. It was expected to stay steady at 5.3%. The rise in core inflation was mainly due to service prices which grew from 4.4% to 4.8% on the year<ref name=":0">https://www.reuters.com/business/retail-consumer/euro-zone-inflation-eases-february-core-prices-surge-2023-03-02/#:~:text=Consumer%20price%20inflation%20in%20the,a%20Reuters%20poll%20of%20economists.</ref>. Falling energy prices mainly contributed to the drop in headline inflation. Energy prices declined to 13.7% from 18.9% in January<ref>https://ec.europa.eu/eurostat/documents/2995521/16138299/2-02032023-AP-EN.pdf/91fa331d-8f61-adff-5e42-d92a64b6ee81?version=1.0&t=1677682415813</ref>. ECB president Christine Lagarde had indicated last week that inflation will likely rise slightly in February but is on track to fall in March due to high energy prices last year which has a base effect on year-on-year comparisons. However, the rise in core inflation raises the possibility of a 50 basis points rate hike in May.<ref name=":0" /> | March 2, 2023: Euro zone inflation moderated slightly in February but was above expectations. Headline inflation in the Euro Zone declined to 8.5% in February from 8.6% in January. Economists polled by Reuters were expecting it to drop to 8.2%. Meanwhile, core inflation rose to 5.6% from 5.3% in January. It was expected to stay steady at 5.3%. The rise in core inflation was mainly due to service prices which grew from 4.4% to 4.8% on the year<ref name=":0">https://www.reuters.com/business/retail-consumer/euro-zone-inflation-eases-february-core-prices-surge-2023-03-02/#:~:text=Consumer%20price%20inflation%20in%20the,a%20Reuters%20poll%20of%20economists.</ref>. Falling energy prices mainly contributed to the drop in headline inflation. Energy prices declined to 13.7% from 18.9% in January<ref>https://ec.europa.eu/eurostat/documents/2995521/16138299/2-02032023-AP-EN.pdf/91fa331d-8f61-adff-5e42-d92a64b6ee81?version=1.0&t=1677682415813</ref>. ECB president Christine Lagarde had indicated last week that inflation will likely rise slightly in February but is on track to fall in March due to high energy prices last year which has a base effect on year-on-year comparisons. However, the rise in core inflation raises the possibility of a 50 basis points rate hike in May.<ref name=":0" /> | ||
== References == | == References == | ||