Inflation in the eurozone eased as expected in March as energy prices grew at a slower annual pace, data showed on Thursday, but economists still expect the European Central Bank to raise rates in June.
Eurostat said consumer prices in the 12 countries using the euro grew by 0.6 percent in March against February. It confirmed its earlier estimate that year-on-year price growth came to 2.2 percent, down from 2.3 percent in February.
The year-on-year and monthly rises were in line with market consensus, but economists said the relatively benign data would not prevent the ECB from upping interest rates by 25 basis points in June to 2.75 percent.
"The eurozone inflation outlook remains steady and benign, but hardly offers any argument to the ECB to soften their rate tightening intentions over the coming months," said David Brown, chief European economist at Bear Stearns.
To determine whether such a process is taking place, economists look at inflation without volatile energy and unprocessed food prices, a measure the ECB calls core inflation.
This grew 0.6 percent month-on-month and 1.4 percent year-on-year in March, accelerating slightly from 1.3 percent in February. The monthly gain was in line with market consensus, but the annual rise was above the expected 1.2 percent.
Eurostat said increases in prices of fuels for transport, gas and heating oil were still the main drivers of headline annual inflation in March, while prices of telecoms services and clothes pulled the index lower.
Energy prices grew by 10.5 percent year-on-year in March, the data showed, slowing from 12.5 percent annual growth in February and 13.6 percent in January.
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