Eurozone inflation slows to 2.4 percent in February; ECB considers more rate cuts

Brussels – Good news: In February, inflation stopped rising and even decelerated. It is slight, of course, by 0.1 percentage points, but just enough to bring the index to 2.4 percent compared to January’s values (2.5 percent). Preliminary estimates from Eurostat note a slowdown in energy (0.2 percent, compared to 1.9 percent in January) and services (3.7 percent, compared to 3.9 percent in January), offset by higher food prices (2.7 percent, compared to 2.3 percent in the previous month).

However, the trend reversal exists, and inflation is approaching the 2 percent European Central Bank benchmark target again. The ECB will meet in Frankfurt on Thursday (March 6) to decide on monetary policy, and in that sense, what is coming from the European Statistical Office may indeed be good news for households and businesses.

The ECB, which bases its decisions on available data, will also rely on February’s preliminary inflation estimates for interest rate choices. Analysts and observers expect a new cut of 0.25 percentage points, which could be the last. On the easing of monetary policies and the need to do so, the Governing Council appears less and less united and, on the contrary, increasingly reluctant to reduce the cost of borrowing money. However, Frankfurt is now more concerned with anemic European growth than inflation, as European Central Bank Vice President Luis De Guindos admitted.