THE inflation to eurozone It slowed more than expected in February, reinforcing European Central Bank arguments (ECB) to continue to reduce interest rates, according to a Bloomberg report.
Consumer prices rose 2.3% annually – less than the 2.4% initially highlighted by Eurostat. Today’s review (19.3.2025) follows an unexpected decline in inflation in Germany.
With the prospects of economic expansion and inflation in Europe being uncertain, ECB officials who are discussing whether to cut or reduce the cost of borrowing next month may be tempted to focus on clear progress in achieving the goal of 2%.
There have been other encouraging signs: wage increases has been mitigated, expectations for inflation remain anchored, and service prices have begun to decline.
But there is also risks to recover inflation. Commercial tensions with the US and the increase in defense and infrastructure spending could lead to prices faster to higher levels.
“We are convinced that the process of deflation and convergence towards the goal of 2% will take place in the coming months,” ECB Vice President Luis de Ginto told Madrid today (19.3.2025), warning that “the current situation is a state of high uncertainty”.
The ECB has already shifted the timetable to achieve its goal at the beginning of next year, with President Christine Lagarde arguing that policymakers must be “extremely careful” and flexible in response to the reaches.