Eurozone inflation continues to fall (at a less pronounced rate than in previous months) but the underlying does not give respite. The harmonized consumer price index (CPI) fell for the fourth consecutive month in February to stand at 8.5%, compared to the 8.6% registered in January. A year ago, the rate was 5.9%.
In the European Union as a whole, the inflation rate also fell slightly from the 10% registered in January to 9.9% in February. A year ago, the rate was 6.2%, according to the final data published this Friday by Eurostat. The community statistical office has confirmed without changes the preliminary figures published on March 2.
the slight descent is mainly explained by the decrease in energy bill compared to stratospheric levels achieved in the last year. At the same time, food has become the main driver of inflation. The price level in the euro area quadruples the 2% target set by the European Central Bank (ECB).
(Lagarde (ECB) makes future rate hikes conditional on the financial storm subsiding)
However, the Underlying inflation (which excludes the more volatile prices of energy, fresh food, alcohol and tobacco) continues to rise, from 5.3% in January to 5.6% in February. This is the main indicator that the ECB uses right now to decide on future rate hikes.
After two consecutive months of price increases, Spain (6%) is no longer the eurozone country with the lowest inflation. Our country falls to third position behind Luxembourg (4.8%) and Belgium (5.4%).
Euro area annual #inflation at 8.5% in February 2023, down from 8.6% in January pic.twitter.com/M0qPToGjtm
— EU_Eurostat (@EU_Eurostat) March 17, 2023
At the opposite end of the classification, the EU countries with the highest inflation are Hungary (25.8%), Latvia (20.1%) and the Czech Republic (18.4%). Compared to January, annual inflation fell in 15 Member States, remained stable in two and rose in 10.
In February, the main contribution to the eurozone annual inflation rate came from food, alcohol and tobacco (+3.1 percentage points), followed by services (+2.02), non-energy industrial products (+1.74) and energy (+1.64).
The final data on inflation in the euro area in February is known one day after the European Central Bank (ECB) decided raise interest rates 0.5 points (until they are at 3.5%). President Christine Lagarde decided to stay the course despite the turmoil in the banking sector, but conditioned the next increases to the subsidence of the storm without leaving damage to the economy.
The Nordic ‘hawks’ have mobilized this Friday to defend that the ECB must continue raising rates at its next meetings because inflation is still too high. This is how both the Governor of the Bank of Slovakia, Peter Kazimir, as the Lithuanian Gediminas Simkus.
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