Inflation in the 20 nations sharing the euro currency slowed to 2.4% last month from 2.6% in February, in line with a preliminary estimate released earlier this month
Euro zone inflation slowed across the board last month, reinforcing expectations for a European Central Bank interest rate cut in June, even as rising energy costs and a weak euro cloud the outlook, final data from Eurostat showed on Wednesday.
Inflation has fallen quickly over the past year, opening the way for interest rate cuts starting in June, even if the next few months are likely to bring choppy price growth data and a drawn-out return to the 2 per cent target. But rising oil prices and a weaker euro both put upward pressure on prices while stubborn services costs raise the risk of underlying price growth getting stuck above target.
The euro has weakened around 4 per cent against the dollar since the start of the year and the movement has been exacerbated by expectation for slower rate cuts by the U.S. Federal Reserve given sticky inflation. Policymakers have so far said that the oil price and exchange rate moves are too small to fundamentally alter the inflation outlook but market expectations for ECB rate cuts continue to retreat.
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