Market News

Eurozone inflation is expected to have dipped for the first time in four months to 2.4% – a slightly hotter read than had been anticipated by analysts.

Analysts polled by Reuters said they thought inflation for last month would hit 2.3% for the bloc.

In January, Eurozone inflation came in at 2.5%, a six-month high.

Eurostat data shows that for February, services is expected to have had the highest annual rate of inflation, at 3.7%, compared with 3.9% in January.

This is followed by food, alcohol & tobacco (at 2.7%, compared with 2.3% in January), non-energy industrial goods (0.6%, compared with 0.5% in January) and energy (0.2%, compared with 1.9% in January).

The cooling headline number will be an important factor at the European Central Bank's (ECB) rate-setting meeting later this week, when it is tipped to cut its key interest rate by a quarter point to 2.5%.

The ECB lowered borrowing costs by a quarter point for the fifth time in January to 2.75%, amid confidence that inflation will go down to the target 2% during 2025.

“The disinflation process is well on track,” ECB president Christine Lagarde said after the decision, strongly hinting that further rate cuts were likely.

“We know the direction of travel,” she said, adding that the speed, timing and magnitude of future rate moves were going to be decided meeting by meeting.