FRANKFURT, March 31 (Reuters) – Inflation within the euro zone dropped by probably the most on file in March however development in core costs accelerated, Eurostat knowledge confirmed on Friday, doubtless strengthening the case for extra rate of interest hikes by the European Central Financial institution.
Shopper costs rose by 6.9% in March after an 8.5% enhance in February, implying the largest deceleration since Eurostat began amassing knowledge in 1991.
The autumn was virtually completely on account of a drop in power costs in comparison with March final yr, once they had surged within the wake of Russia’s invasion of Ukraine.
However an index that excludes power and meals costs, recognized by economists as core inflation and seen as a greater gauge of the underlying pattern, accelerated barely to 7.5% from 7.4% in February.
Analysts polled by Reuters had anticipated headline inflation within the 20 international locations that share the euro to return in at 7.1% and core inflation at 7.5%.
After a file streak of charge rises, the ECB has avoided committing to extra hikes, saying it will rely upon whether or not the present turmoil within the banking sector subsides and on knowledge together with underlying inflation.
However a number of ECB policymakers together with chief economist Philip Lane have stated not too long ago that extra will increase in borrowing prices are prone to be wanted to convey inflation again to the central financial institution’s 2% goal.
Reporting By Francesco Canepa; Enhancing by Catherine Evans
Price this text