In February, inflation in Europe fell to 2.4%, down from 2.5% in January, indicating progress by the European Central Bank (ECB) in managing inflation. The decline supports expectations for a quarter-point interest rate cut to 2.5%. However, worries about economic growth persist, as the eurozone stagnated in late 2024 due to cautious consumer spending and business uncertainty, especially regarding potential U.S. tariffs. The ECB's upcoming decision will be closely watched, particularly for insights on future rate cuts amidst evolving economic conditions.
The lower consumer price inflation figure supports the view that the ECB is succeeding in its battle to get inflation back to its target of 2%.
The February figure for the 20 countries using the euro currency was down from 2.5% in January as energy inflation dwindled.
Worries about growth have emerged after the eurozone stagnated in late 2024, highlighting consumer caution and business concerns over export tariffs.
The big question at the upcoming interest rate meeting is whether President Christine Lagarde will provide clues about the extent of future rate cuts.
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