Inflation in the euro zone fell to a surprisingly low 2.4 percent in March. The year-on-year increase in prices was 0.2 percentage points lower than in February, as announced by the EU statistics office, Eurostat in Luxembourg, in an initial estimate. In particular, food prices rose much more slowly than the previous month.
Food, alcohol and tobacco prices rise less sharply
According to statisticians, the increase in food, alcohol and tobacco prices in March was only slightly above average, at 2.7 percent. In February the increase was 3.9 percent and in January it was even 5.6 percent.
The increase in service prices remained unchanged at 4.0 percent compared to previous months. Prices of energy products fell by 1.8 percent. However, compared to February (-3.7 percent) and January (-6.1 percent), the drop was significantly smaller.
Will the ECB respond with interest rate cuts soon?
The European Central Bank (ECB) had already revised downwards its inflation expectations for the current year at the beginning of March to an average of 2.3 percent. With inflation falling, pressure is mounting on the ECB to lower the key euro zone interest rate for the first time at its next meeting next week. The ECB has so far left the key interest rate unchanged at 4.5 percent.
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