Euro zone inflation unexpectedly eases, boosting rate cut case

April 03, 2024

Euro zone inflation fell unexpectedly last month, solidifying the case for the European Central Bank to start lowering borrowing costs from record highs. Consumer price growth in the 20 nations sharing the euro currency slowed to 2.4% in March from 2.6% a month earlier, defying expectations for a steady rate as food, energy and industrial goods prices all pulled the headline figure lower. Some policymakers also fear that moving too far before the U.S. Federal Reserve begins reducing rates could be counterproductive, since a cut would weaken the euro and boost imported inflation. Dovish policymakers, meanwhile, argue that economic growth is now exceptionally weak as the euro zone has been skirting a recession for six quarters now. This weakens corporate pricing power and thus eases price pressures, so the ECB can afford to ease up on the brakes, especially since lower commodity prices are also helping disinflation.

The source of this news is from Tuoi Tre News