1 April | Euro

Eurozone inflation falls to 2.2% in March as US trade restrictions loom

Eurozone inflation falls to 2.2% in March as US trade restrictions loom

Eurozone inflation fell to 2.2% year-on-year in March, moving closer to the European Central Bank's (ECB) 2% target. Such a result was made possible by a decline in services prices and a drop in the core consumer price index, which fell to 2.4% from 2.6% in February.

Analysts point to a significant influence of external factors on the current price dynamics. In particular, the trade policy of the Trump administration, which provides for 25% tariffs on cars, raises concerns among European experts about a possible new round of inflation. 

According to Bloomberg Chief Economist Jamie Rush, the slowdown in inflation sets the stage for further ECB rate cuts. Given the low unemployment rate of 6.1%, and the need to support the economy which is under pressure from trade restrictions, the European regulator is likely to continue easing monetary policy, Rush believes. Based on current economic indicators, the market estimates the probability of a rate cut by the ECB at the April 17 meeting at 70%.

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