Euro area inflation slowed down in February

Consumer prices Inflation slowed down in February in the euro area. According to preliminary information released on Monday, prices increased by 2.4 percent from a year ago.

Economists anticipate in the Reuters survey that the rise in consumer prices would have slowed down to 2.3 %. From the previous month, January, prices increased by 0.5 per cent.

In February Energy increased by 0.2 percent from a year ago, unprocessed foods by 3.1 per cent, industrial products by 0.6 % and services by 3.7 per cent.

In February, the central banks and economists closely followed by central banks and economists were 2.6 per cent. In January it was 2.7 per cent.

Bottom inflation is an important meter because it has removed the direct impact of sensitive energy and food on consumer prices.

“Inflation seems to be dampened by two percent, which is due, in particular, to slowing down service prices. This is in favor of the market’s view that the central bank will continue to cut interest rates during the spring, ”says the forecasting manager of the Business Research Institute Päivi Puonti.

From slowing down Despite the inflation rate, the rate of inflation is still a bit faster than the price stability target of the European Central Bank (ECB). According to the target, inflation should be two percent in the medium term.

In the financial markets, it is very likely that the central bank will cut 0.25 percentage points on its control interest on Thursday and will continue to operate later in the spring.

“It is almost certain that the central bank will lower the rating interest on Thursday. At this point, we expect the Central Bank to continue the interest rate cuts in the summer, which would mean that the interest rate would be 1.50 percent in September, ”says Danske Bank’s main analyst in the financial company Minna Kuusisto.

Economic growth in the euro area is still fragile. US President Donald Trump Threatening 25 % import duties for European products are likely to slow down economic growth.

Interest cuts strengthen economic growth as they are likely to increase household consumption and business investment. Currently, the control interest rate is 2.75 %.

“It is our perception that the central bank will lower the control interest rate by 0.25 percentage points on Thursday and then in April, after which it will end the interest rates. However, this requires that economic growth be stronger by the summer, ”says Nordea, the financial company Nordea Wind.

Geographically Inflation was the fastest in Estonia, Croatia and Belgium in February. In Estonia, prices increased by 5.0 per cent from a year ago, 4.7 per cent in Croatia and 4.4 per cent in Belgium.

The slowest inflation was in France, Ireland and Finland. In France, prices increased by 0.9 per cent a year ago, 1.3 per cent in Ireland and 1.5 per cent in Finland.