Euro zone inflation slowed in March and the core figure dipped, the European Union’s statistics office said on Wednesday, confirming its initial estimates and providing an uncomfortable signal for the European Central Bank (ECB).
Eurostat said prices in the 19-nation currency bloc rose 1.4 per cent in March on the year, from a 1.5 per cent increase a month earlier, confirming the previous reading.
The ECB targets an inflation rate below, but close to 2.0 per cent, and last week raised the prospect of more support for the euro zone in the face of an economic slowdown.
On the month, inflation accelerated to 1.0 per cent, as markets had expected, from 0.3 per cent in February.
The core indicator watched closely by the ECB for its monetary policy decisions, which excludes volatile energy and food prices, dropped to 1.0 per cent in March on the year from 1.2 per cent in February.
That was the weakest reading since April 2018, Eurostat data showed, confirming earlier estimates.
This can add to the pressure on the ECB as it battles an economic slowdown, which threatens to undo years of stimulus, while many of its own rate-setters think the bank’s economic projections are too optimistic.
A narrower inflation indicator that excludes energy, food, alcohol and tobacco was also confirmed dipping to 0.8 per cent from 1.0 per cent a month earlier.
Inflation was held back by a slowdown in price rises of food, alcohol and tobacco, which rose 1.8 per cent on the year in March after a 2.3 per cent rise in February.