Two women hold umbrellas as they sit at an outdoor table at a cafe in Rome, Italy on April 01, 2024.
Emanuele Cremachi | Getty Images News | Good pictures
Inflation in the 20-nation euro zone eased to 2.4% in March, according to flash figures released on Wednesday, boosting expectations for interest rate cuts starting in the summer.
Economists polled by Reuters had expected the rate to be 2.6% from the previous month.
Core inflation, which excludes energy, food, alcohol and tobacco, cooled from 3.1% to 2.9%, coming in below expectations.
However, services inflation – the European Central Bank's key monitor – stuck at 4% for a fifth straight month, pointing to continued pressure on wage growth.
Another indicator from the ECB released on Wednesday showed that the euro area unemployment rate was 6.5% in February, steady against January but projected to 6.6% in February 2023.
The price goes up France And Spain Last week came in lower than forecast. On Tuesday, core inflation in the crowd's largest economy, GermanyThe three-year low was estimated at 2.2%.
Markets expect the euro zone's central bank to start cutting interest rates in June – a reflection of recent news from ECB decision makers. The next fiscal policy meeting will be held on April 11.
“The current narrative points to the first rate cut in June, as it will be a meeting with a full volume of important data: a new round of ECB staff projections, GDP growth and wage growth data for the first quarter of 2024, and the results of a bank lending survey, to name the most relevant,” ING's Macroin said. Carsten Breschi, the global leader, said in a note on Wednesday.
“We expect the ECB to be on hold next week and further prepare markets for the first rate cut in June.”
