Inflation in the Eurozone dips to 1.7 per cent

Ben Southwood
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INFLATION across the Eurozone edged down further below target in March, reaching a 31-month low, according to early estimates released yesterday.

The euro area saw consumer prices climb 1.7 per cent over the year to March, Eurostat estimated, down from the 1.8 per cent growth the bloc registered over the 12 months to February.

This was the lowest annual inflation seen since August 2010, and comes after the zone saw mild month-on-month deflation at the turn of the year.

Within the overall figure, energy inflation slowed down sharply from 3.9 per cent to 1.7 per cent – and down from 8.5 per cent a year earlier.

But non-energy industrial prices – known as core inflation – and services inflation both picked up substantially.

“These increases might fuel speculation that underlying price pressures in the Eurozone are starting to pick back up again,” said Capital Economics’ Jonathan Loynes. “But we think that would be a premature conclusion.”

“Wage pressures remain generally subdued and the euro’s previous strength should continue to push import prices down for some time yet,” Loynes added.