Economic Buzz: Eurozone Inflation Slows In February

Marco Green
March 2, 2018

The decline mainly reflected a decline in unprocessed food inflation from 1.1 percent in January to minus 0.9 percent in February. Nonetheless, the rate came in line with expectations.

Although the current situation in the Euro zone is good, a lasting return of inflation still depends on broad monetary support from the European Central Bank (ECB), the bank's president, Mario Draghi, said on Monday at the European Parliament in Brussels.

Data showed the services, which is a sizable part of the core inflation measure, saw price growth increase from 1.2 percent to 1.3 percent in February.

However, the core inflation, which excludes changes in volatile commodity prices such as energy and food and is considered a more accurate indicator, remains unchanged at 1.0%. Final data is due on March 16.

Bert Colijn, an ING economist said, with inflation dropping to 1.2 percent and core inflation steady at 1 percent, expectations of a quick return of inflation seem exaggerated for the Eurozone, making a cautious European Central Bank next week very likely.

Launched three years ago to fight off the threat of deflation, the ECB's 2.55 trillion euro ($3.14 trillion) bond purchase program has kept borrowing costs low to induce spending and investment, all with the ultimate aim of generating inflation.

Similarly, France's harmonized inflation weakened to 1.3 percent from 1.5 percent in January.

Other reports by Click Lancashire

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