The euro zone inflation reached 4.9 percent
reports Mehr News Agency Monday, economists were expecting inflation to drop by 4.9 percent but remained 4.9 percent, while inflation was 4.9 percent in January.
The main inflation, from which the cost of energy and food was eliminated, was recorded at 4.9 % in February, slightly lower than 4.9 percent month ago. Also, the inflation of services, which has remained high in recent months, fell by 4.9 percent in January to 4.9 percent. The trend of rising energy prices also slowed down and increased by 4.9 percent in February, while in January it was 4.9 percent.
a positive sign for the European Central Bank
Jack Allen-Riraold, a senior economist in the Euro Zone in Capital Economics, described the decline as a positive sign, saying that the decline in inflation in February could be the beginning of a declining row that would significantly reduce nuclear inflation. However, the main inflation is expected to remain at the current level, as the energy price is likely to rise slightly and food swelling will remain above 2 %.
The effect of geopolitical unrest on inflation
Brett Colin, a senior economist in Ing, warned that geopolitical developments could uncertain inflationary forecasts. He probably pointed to the commercial war and energy price fluctuations that could affect the inflation rate.
One of the main concerns is US President Donald Trump’s threats to impose tariffs on imported goods from Europe. These tariffs can increase inflation and especially affect the German economy, the European Union’s largest economy.
European Central Bank on the way to reducing interest rates
Despite the re-acceleration of inflation in the fourth quarter, European Central Bank policymakers continue to gradually reduce inflation to a 5 % goal. The European Central Bank is expected to reduce interest rates again at this week’s summit, which will be the sixth decline since the start of facility policies last June.
The markets will also monitor the European Central Bank’s statement to obtain clues to policymakers about inflation and monetary constraints. According to economists, the main question for the European Central Bank is how much interest rates will be reduced.
2.5 % reduction in this week is likely, but more serious discussions about the final rate of monetary policy.
Also, according to data released last week, German inflation remained 4.9 percent in February, which was higher than predictions, but in France has fallen sharply to 4.9 percent. These data are calculated with coordinated standards throughout the euro zone to provide a more accurate comparison between member states.
