From Morningstar: 2024-04-03 07:00:00

In March, inflation in the Eurozone rose to 2.4% year on year, a 0.2% decrease from the previous month, surprising economists who were expecting a flat reading. Core inflation, excluding energy and food costs, also fell to 2.9% year on year. Services were the biggest contributor to inflation at 4%, followed by food, alcohol, and tobacco.

Despite the rise in inflation, the European Central Bank is not expected to change monetary policy at the meeting on April 11. The ECB is still aiming for inflation to fall to 2.3% by year end, reaching the 2% target in 2025. A recent poll shows that 90% of economists expect the first interest rate cut in June, barring any major economic shifts. Core inflation also decreased slightly but is heading in the right direction towards the 2% target.

Natasha May from J.P. Morgan emphasized the importance of wage data in determining future interest rate cuts by the ECB. If wage growth and services inflation continue to cool, the central bank may follow through with a rate cut in June as promised.



Read more at Morningstar: Eurozone Inflation Falls Again in March