Bert Colijn, senior economist at ING, notes that the Eurozone’s inflation fell slightly from 1.5% to 1.4% in March, with core inflation dropping to 0.8% as the timing of Easter continues to distort inflation in the spring months.
Key Quotes
“Although a detailed breakdown isn’t available yet, package holidays inflation is likely to have negatively impacted this release as 2018 Easter holiday started in March. The decline in services inflation from 1.4% to 1.1% certainly suggests this has had a considerable impact.”
“Next month will likely see some overshooting of 1% due to the Easter effect reversing, but the underlying story remains one of subdued core inflation as businesses continue to take higher wage growth in their margins because of global uncertainty.”
“Headline inflation dropped less than the core and stands at 1.4% as fuel prices have rebounded over recent weeks.”
“A drop to 1% is possible, meaning that the rate is likely to move away from the ECB target over the coming months before moving closer again.”
Share
