Eurostat: EU inflation fell more than expected

According to Eurostat data released on Wednesday, EU inflation fell to 2.3% in February, revised down from a preliminary estimate of 2.4%. The main factor contributing to the decline was the reforms implemented in Germany.

As noted by Reuters, the decline may alleviate the EU statistical office's concerns about strong price pressures in the region, which could have hindered a potential ECB interest rate cut.

Core inflation, which excludes volatile food and energy prices, remained unchanged at 2.6%. The monthly increase was slightly adjusted from 0.6% to 0.5%.

Despite this revision, expectations for the ECB's April meeting remain largely unchanged. The financial regulator continues to rely on incoming economic data amid high uncertainty, the agency said.

Factors influencing ECB policy include trade tensions, increased fiscal spending, and lower energy costs. Markets are currently pricing in a 50-60% chance of an April rate cut.

The ECB forecasts that inflation will stabilize at the current rate by the end of the year and then reach the 2% target in early 2026. This was reported by Reuters.