A seller prepares a bag of sweets for a customer at Mazzone, a Sicilian confectionery shop in Catania, Italy on February 02, 2024.
Villa Fabrizio | Getty Images News | Good pictures
Inflation in the 20-nation euro zone eased to 2.6% in February, flash figures showed on Friday, but headline and key figures were higher than expected.
Economists polled by Reuters had forecast a headline rate of 2.5%.
Core inflation, which strips out the volatile components of energy, food, alcohol and tobacco, came in at 3.1% – higher than the 2.9% expected.
The inflation rate for food, alcohol and tobacco was 4% in February, while services were 3.9%, the EU statistics agency said.
Energy prices, which were inflated last year as a result of Russia's invasion of Ukraine, continued to moderate as the rate of inflation moved from -6.1% to -3.7%.
Headline inflation was 2.8% in January, expected to ease further after inflation cooled in Germany, France and Spain.
Investors are looking for clues as to when the European Central Bank will start cutting interest rates, with market prices pointing to a June cut. Nevertheless, many ECB officials still insist that spring wage talks are needed before they can get a clearer picture of domestic inflationary pressures.
The February figures will be a mixed bag for policymakers as core inflation remains above 3% as the headline rate moves towards the ECB's 2% target. However, inflation has slowed significantly from a peak of 10.6% in October 2022.
The ECB has to fight economic stagnation in the Eurozone A recession was narrowly avoided Last year, it recorded flat GDP growth in the fourth quarter.
European stock gains moderated following the inflation axis, trading 0.2% higher from 0.5% in the morning. The euro was flat against the US dollar and the British pound.
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