Euro Zone Inflation: Difference between revisions

* In May, the highest contribution to the annual euro area inflation rate came from food, alcohol & tobacco (+2.54 percentage points, pp), followed by services (+2.15 pp), non-energy industrial goods (+1.51 pp) and energy (-0.09 pp)

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>.