Eurozone inflation moderated by less than expected in February despite rapidly easing energy prices, adding to signs that price pressures are more persistent than previously thought.
Consumer prices rose 8.5% in February compared with the same month a year earlier, easing slightly from a 8.6% annual increase in January, preliminary data from the European Union’s statistics agency Eurostat showed Thursday.
The reading exceeds the 8.2% consensus forecast from economists polled by The Wall Street Journal.
The decline in inflation was driven by moderating energy prices, which increased by 13.7% on year in February, slowing from a 18.9% on-year rise in January.
However, food prices increased 15% on year, more than the 14.1% rise a month earlier. Inflation of both nonenergy industrial goods and for services also gained pace, the data showed.
The core annual inflation rate–which strips out the more volatile categories of food and energy, and one of the key data for the European Central Bank to consider at policy decisions–accelerated to 5.6% in February from 5.3% in January, reaching a record high.
The European Central bank is expected to increase interest rates by another 50 basis points at its next meeting on March 16 as price pressures remain high and the economy has averted a recession so far.
Investors are ramping up their expectations for where they expect eurozone interest rates to peak due to recent comments from European Central Bank policymakers, high inflation and a relatively resilient economy.
Write to Xavier Fontdegloria at [email protected]
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