Inflation in the eurozone is gradually approaching the two percent target of the European Central Bank (ECB). In July of last year, it started raising interest rates with the aim of bringing inflation under control, but last October it stopped raising interest rates. Since then, it has kept its base interest rate at 4.5 percent.
Wednesday’s inflation data supports the prospect of interest rate cuts in the eurozone. The next ECB meeting will take place next week, but according to analysts, the bank is not expected to start cutting interest rates before June, the AP agency wrote.
At the March meeting, the ECB left interest rates unchanged, but lowered its estimate of inflation in the eurozone for this year and next. The March forecast assumes that average inflation will be 2.3 percent this year and will drop to two percent next year.
The data showed that year-on-year growth in food, alcohol and tobacco prices in the eurozone slowed to 2.7 percent in March from 3.9 percent in February. Energy prices decreased by 1.8 percent year-on-year, although the pace of their decline slowed from February’s 3.7 percent.
Inflation in the US rose surprisingly in February
Economy
