Inflation in the euro zone stood at 8.6% in February, one tenth less than in the previous month, according to data published this Thursday by Eurostat. It is the fourth consecutive month of decreases, but the figure is somewhat above what was expected by the market and only fell due to a drop in energy. The rest does not bring good news.
The persistence of inflation, which surprises economists, serves as an argument for the European Central Bank (ECB) to maintain its path of raising interest rates, already at 3%. This same Thursday, the president of the ECB, Christine Lagarde, has stated that in addition to the rate hike that will take place in two weeks, others will follow later. In this way, the first rate cut is not expected until at least 2025. “Interest rates will not return to where they were a few years ago,” she has raised.
By groups, subjacent inflation, without energy, fresh products, alcohol and tobacco, rose three tenths and reached 5.6%. Another data worse than expected, since in countries like Germany, France or Spain the data is still higher than expected, cutting any downward trend. “The rise in inflation opens the door to more pressure from central banks with new rate hikes and surprises investors,” says Mario Catalá, director of discretionary management at Portocolom AV.
The food, alcohol and tobacco group rose 15%, from 14.1% in January. It is the big driver of prices. The main breather, if you can say, comes from the energy side. Its data increases by 13.7%, five points less. “With the worst of the winter already past, it is foreseeable that the disinflationary pressure of the energy markets will increase in the coming months,” they comment from Oxford Economics.
Both services (4.8%) and industrial goods (6.8%) also worsened their evolution, by four and one tenth respectively.
In February, the highest inflation was registered in Latvia, with 20.1%, while Luxembourg was on the opposite side, with 4.8%. Spain scored 6.1%, below the Italian 9.9%, German 9.3%, Portugal 8.6%, France 7.2% or Greece 6.5%.
A handful of countries are still above double digits. It is surpassed by Estonia (17.8%), Lithuania (17.2%), Slovakia (15.5%), Croatia (11.7%) and Austria (11%).
