Eurozone inflation gives a respite

Inflation rates across Europe have shown signs of heading upwards, a timely boost in the wake of the ECB’s purchases of sovereign bonds which commenced this week.

Inflation in Spain was again in negative territory, with figures showing that prices dropped by -1.1 % year-on-year to February, although results were slightly above what had been predicted. Month-on-month inflation in the Spanish economy edged up 0.1% in February to 117.82, reversing a trend of four consecutive monthly declines.

Of more significance for the wider eurozone economy, figures from Germany showed that prices on the continent’s largest economy were flat with rises of 0.1% for the year to February. Such a figure is quite a distance from the ECB’s stated target of 2% inflation, yet the month-on-month figures to February offer a slight cause for optimism. Prices in Germany rose by 0.9% for the month, giving an impression that price recovery may be taking place.

Elsewhere, French monthly inflation also went up to 0.7%, although Europe’s second largest economy recorded a year-on-year drop of -0.3% for the year to February.



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