Preliminary data published by Eurostat showed that the eurozone annual inflation slowed in March, confirming economists' forecasts. Meanwhile, core inflation reached its lowest level since January 2022. Overall, the latest data reinforced expectations of further easing of the ECB's monetary policy at the April meeting. Markets now see a 70% to 75% chance of a cut in the ECB's 2.5% deposit rate in April, with a move by June more than fully priced in.
According to the report, the consumer price index rose by 2.2% per year after increasing by 2.3% per year in February. Consensus estimates also suggested an increase of 2.2% per annum. Meanwhile, on a monthly basis, the consumer price index rose 0.6%, accelerating from February (+0.4%) and confirming economists' forecasts. This was the strongest growth since April 2024.
Eurostat reported that the core consumer price index - excluding energy, food, alcohol & tobacco - rose by 2.4% per year (the lowest value since January 2022) after increasing by 2.6% per year in February. Consensus estimates suggested an increase of 2.5%.
The data showed that the annual growth of the overall consumer price index was due to an increase in the cost of services (+3.4% vs. +3.7% in February), food, alcohol & tobacco (+2.9% vs. +2.7%), non-energy industrial goods (+0.6% vs. 0.6%). Energy prices fell 0.7% after rising 0.2% in February.