Inflation is the most important criterion for interest rate policy. (Photo: Freepik, Weyo)
Luxembourg – Inflation stagnated in February – how does inflation develop in the euro area? On Monday, the statistics authority Eurostat publishes its estimate for the past month. The inflation trend is likely to determine the further interest rate policy of the European Central Bank.
The euro control is said to have decreased again in February, by 0.2 to 2.3 percent in the year-at least the middle forecast according to the fact set. Previously there had been 4 climbs in a row. The September value was 1.7 percent, after a record stand in October 2022 of 10.6 percent.
Development of the core inflation – service sector remains a problem
The important core inflation should also go back. 2.6 percent expect economists after 2.7 percent in January. Here the statisticians cling the prices for energy and food that are prone to fluctuation. The core rate indicates the price buoyancy on the economic basis.
The service sector in particular has been driving the prices in the euro zone for months: In January Consumers had to pay 3.9 percent more than in the previous year. Food and luxury food also became noticeably more expensive – by 2.3 percent. Energy costs increased by 1.8 percent.
2 inflation values in Europe-inflation in other euro countries
Important to know: Many euro countries calculate 2 consumer price indices. In addition to the harmonized consumer price index (HVPI) according to EU standard, a national index. In Germany, HVPI control in February was 2.8 percent, During the national index increased by 2.3 percent.
Easy in Germany was not only stagnating in February, but also in Spain, where the harmonized annual rate was 2.9 percent and in Italy with 1.7 percent compared to the previous year. It is different in France, where the price lift in February decreased by a whopping 0.9 to 0.9 percent.
Forecast: Interest decision of the ECB – Key interest until the end of 2025
The inflation trend is the most important criterion if the European Central Bank decides on interest rates in the euro area next week. In one Reuters survey If all 82 surveyed economists assume that the central bankers will reduce the deposit interest by 0.25 to 2.5 percent.
After that, the currency keepers could be more careful, says Anthony Willis of Columbia Threadneedle Investments. In the Reuters survey, only 32 out of 82 respondents expect an interest rate below 2 percent at the end of the year. The markets have already priced this brand.