ECB vs inflation

Exchange offices in Rome, protests in Berlin as a result of high inflation and the head of the European Central Bank, Christine Lagarde. TT 

ECB vs inflation  

ECB vs inflation Core inflation in the eurozone at a record high - but the CPI figure at the lowest level in a year  

Core inflation in the eurozone rose to a record 5.7 percent annual rate, compared to 5.6 percent in February. The figure, which excludes energy and food prices, thus came in line with expectations.  

The increase may signal that inflation is digging deeper into the economy, AP writes. According to Reuters, the announcement is likely to pave the way for new interest rate hikes from the European Central Bank ECB.  

The prices of food, alcohol and tobacco increased significantly. The prices of services also increased, although not as much. In advance, the development of core inflation had been singled out as the most important figure for the market.  

At the same time, the broader CPI figure fell more than expected, from 8.5 percent in February to 6.9 percent in March. Expected was 7.1 percent. The figure thus falls to the lowest level since the war began in February 2022. The reduction is mainly due to falling energy prices. 

 Illustration image. Adam Ihse/TT European Central Bank President Christine Lagarde. Olivier Matthys / AP

ECB vs inflation

Economists agree: the ECB is not finished with the increases  

The European Central Bank ECB is not finished with its interest rate hikes, write several economists minutes after the inflation figure in the euro zone for the month of March was presented. The CPI figure fell sharply to 6.9 percent, but core inflation instead rose to 5.7 percent. 

"I suspect the ECB will take only limited comfort from this and is unlikely to change its current rate hike, at least for now," Allianz chief economist Mohamed El-Erian writes.  

Daniel Kral, senior economist at research firm Oxford Economics, agrees that the ECB is not done with the hikes. Jon Arnell at Max Matthiessen agrees, but is still not completely disheartened by the inflation figure:  

"We take it as a positive, even if it leads to further increases from the ECB."