Eurozone Inflation Eases To 14-Month Low
28 February 2018 - 6:27PM
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Eurozone inflation slowed to a 14-month low in February on food
and energy prices, flash data from Eurostat showed Wednesday.
Inflation eased to 1.2 percent from 1.3 percent in January. This
was the third consecutive slowdown and the weakest since December
2012, when prices gained 1.1 percent. Nonetheless, the rate came in
line with expectations.
Inflation continues to stay below the European Central Bank's
target of 'below, but close to 2 percent'.
Core inflation that excludes energy, food, alcohol and tobacco,
held steady at 1 percent in February. Final data is due on March
16.
February's decline in headline inflation does not change the
assessment that the ECB will drop the easing bias from its forward
guidance at its meeting on March 8, Jack Allen, an economist at
Capital Economics, said.
But with core inflation still weak and likely to rise only
slowly, interest rate hikes are likely to be a long way off, the
economist added.
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 ECB next week very likely.
Among major euro area economies, Germany's inflation fell to 1.2
percent in February, the lowest since late 2016, from 1.4 percent a
month ago.
Similarly, France's harmonized inflation weakened to 1.3 percent
from 1.5 percent in January. At the same time, Italy's inflation
dropped markedly to 0.7 percent from 1.2 percent.
On the other hand, Spain's inflation accelerated to 1.2 percent
from 0.7 percent a month ago.
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