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Eurozone inflation eases in February

Latest headline and core rates fall by less than expected, cooling any talk of pre-June rate cut.

01 March 2024

Euro area inflation came down less than forecast but eased from the previous month’s reading nonetheless. February’s reading showed inflation running at a 2.6% annual rate, higher than the 2.5% forecast but down from January’s 2.8%. Energy price declines were more than offset by continual inflation in services, food, alcohol and tobacco. This corroborates the cautious stance from the European Central Bank (ECB) that immediate cuts are not warranted just yet. Market pricing has shifted marginally to the first cut now coming in June, with economists aligning to the ECB’s view that acting early could be more problematic than acting later, even if the broader Euro area economy is struggling. That light at the end of the rate cut tunnel just remains annoyingly out of sight.

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Charles Hepworth

Investment Director
My Insights

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