Euro zone inflation drops to 8.5% in February: Eurostat
The annual rate of inflation in the euro zone was 8.5% in February, the EU’s statistics office said on Thursday.
The drop from last month’s figure of 8.6%, however, was smaller than expected, with analysts at financial data firm FactSet predicting a sharper drop to 8.2%, while Bloomberg’s forecast was of 8.3%.
While inflation was lower than October’s 10.6% rise, fears persisted that the previous rise in energy prices will now have a bigger impact on the economy among the 20 countries that use the euro.
Annual inflation remains above the European Central Bank’s (ECB) target of 2%.
Rising food costs
A continued decline in energy costs has pushed consumer prices lower, but in February the rise in food and beverage costs outpaced that of energy.
Eurostat showed that food and drink prices rose by 15% last month.
Luxembourg had the lowest inflation rate in the euro zone last month at 4.8%, according to Eurostat, followed by Belgium at 5.5% over the same period.
Germany’s federal statistics office, Destatis, said on Wednesday that February’s inflation rate was 8.7%, the same as the previous month.
ECB: March will see interest rate hikes
ECB President Christine Lagarde said last month that the institution plans to raise its interest rates by half a percentage point at its March meeting.
Lagarde said price drops have been erratic and rates will have to stay high for some time.
Last month, the EU published revised economic forecasts, saying the bloc had narrowly avoided a technical recession and had already passed its peak of inflation.
Source: DW
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