European Countries See Decline in Inflation Rates
In March, inflation in European countries fell more than expected to 2.4%, alleviating concerns about rising costs for consumers. The decrease from 2.6% in February brought the European Central Bank closer to its inflation target of 2%, although analysts suggest it may not be sufficient to prompt an interest rate cut.
The drop in inflation was driven by declines in various sectors, with food inflation falling to 2.7% from 3.9%, energy prices dropping by 1.8%, and core inflation easing to 2.9% from 3.1%. Countries like Germany and France also saw a decrease in their inflation rates, with Germany’s rate falling to 2.3% and France’s to 2.4%.
Despite the struggling economy, the ECB’s rate-setting council is not expected to announce a rate cut until June. The U.S. Federal Reserve is also anticipated to cut rates later this year, with officials considering three rate cuts.
In October 2022, inflation spiked to a record high of 10.6% due to various factors, including the cutoff of natural gas supply by Russia and supply chain issues from the pandemic. Workers are now pushing for higher pay, slowing the decline in inflation and causing the ECB to be cautious about cutting interest rates too soon.
The eurozone economy did not experience growth in the last quarter of 2023, and figures for the first quarter of this year are set to be released on April 30. Stay tuned for further updates on the evolving economic landscape in Europe.
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