FRANKFURT (Reuters) – Headline inflation in the euro zone posted its sharpest slowdown in March, but excluding volatile elements price inflation has picked up, which could prompt the European Central Bank (ECB) to continue its monetary tightening, shows the first estimate published Friday by Eurostat.
The consumer price index calculated to European standards (HICP) came out at 6.9% over one year, the sharpest deceleration since the collection of data for this statistic in 1991.
The Reuters consensus gave it at 7.1% after an annual increase of 8.5% in February.
Core inflation, which excludes energy and unprocessed food, however rose from 7.5% to 7.4%, against a consensus of +7.5%.
An even narrower measure, which also excludes alcohol and tobacco, shows that it is up 5.7% after +5.6% and a consensus at +5.7%.
The ECB has raised the cost of credit by 350 basis points since July, but gave no indication for its May 4 meeting due in part to the financial turmoil. The ECB’s chief economist, Philip Lane, however, recently estimated that rates would have to rise further to ensure that inflation falls back to 2%.
(Report Balazs Koranyi; Claude Chendjou, edited by Kate Entringer)
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