Eurozone Inflation Steady At 0.9% In February

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Eurozone consumer price inflation was stable in February, while core price growth slowed, flash figures from Eurostat showed Tuesday.

The consumer price index rose 0.9 percent year-on-year, same as in January, and in line with economists’ expectations. Inflation was in positive territory for a second straight month.

Core inflation, which excludes prices of energy, food, alcohol & tobacco, eased to 1.1 percent from 1.4 percent in January. This also matched economists’ expectations.

Compared to the previous month, consumer prices rose 0.2 percent in February, same as in January.

The food, alcohol & tobacco component registered the highest annual rate of increase in February, 1.4 percent versus 1.5 percent in January.

The rate of increase in services costs slowed to 1.2 percent from 1.4 percent, and that for non-energy industrial goods eased to 1.0 percent from 1.5 percent.

The pace of decline in energy prices slowed sharply to 1.7 percent from 4.2 percent.

The full data for February is scheduled for release on March 17.

“We expect inflation to temporarily exceed 2 percent later in the year, but the only worry for the European Central Bank?at the moment is higher bond yields, not higher prices,” ING economist Bert Colijn said.

The central bank is likely to see these inflationary drivers as largely fleeting, but policymakers are set to express worry over the higher bond yields that have been driven by developments in the US, the economist said.

“Because of that, we expect the?ECB to increase?asset purchases and address the rising bond yields at next week’s meeting,” Colijn added.

The material has been provided by InstaForex Company – www.instaforex.com

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