Eurozone inflation February 2024

Core inflation, which excludes volatile components such as energy, food, alcohol and tobacco, was 3.1% – higher than the 2.9% expected.

The European Union statistics agency said food, alcohol and tobacco prices recorded the highest inflation rate in February at 4%, followed by services at 3.9%.

Energy prices, which inflated last year as a result of Russia's invasion of Ukraine, continued to fall, with the rate of deflation moving from -6.1% to -3.7%.

The headline reading was previously at 2.8% in January, with further easing expected after price increases slowed in Germany, France and Spain.

Investors are looking for clues as to when the European Central Bank will start cutting interest rates, with market prices pointing to a cut in June. However, many ECB officials still maintain that they need to conclude wage negotiations in the spring before they have a clearer picture of domestic inflationary pressures.

February's numbers will be mixed for policymakers, with core inflation remaining above 3% even as the headline rate moves towards the ECB's 2% target. Price rises have slowed significantly from their peak of 10.6% in October 2022.

The European Central Bank also has to deal with the post-bloc economic recession in the eurozone Hardly avoid stagnation Last year, it recorded steady growth in GDP in the fourth quarter.

European stocks eased gains after the inflation print, trading 0.2% higher, down from 0.5% earlier in the morning. The euro stabilized against the US dollar and the British pound.