Expectations that inflation is gradually moving back towards the European Central Bank’s 2% target were strengthened in February when price pressures throughout the eurozone were lowered lower. According to Eurostat data issued on Wednesday, headline inflation increased by 2.3% year-over-year last month, which was lower than the prior estimate of 2.4% and lower than the 2.5% increase in January.
Core inflation, which does not include food and energy, decreased from 2.7% in January to 2.6%, the lowest level since January 2022. At 0.9%, France had the lowest annual inflation rate among EU nations, followed by Finland (1.5%) and Ireland (1.4%). Estonia (5.1%), Romania (5.2%), and Hungary (5.7%) recorded the highest percentages.
Belgium experienced the largest monthly increase in inflation, reaching 2.4%, followed by the Netherlands (1.4%) and Estonia (1.3%). Greece and Croatia saw no change in consumer prices, but Portugal was the only nation to see a price drop (-0.1%).
Investor expectations for future price trends are still low, even though inflation data is improving. According to the most recent Bank of America Fund Manager Survey, only a net 7% of European investors, the lowest level since April 2022, anticipate lower inflation in the eurozone over the next year.
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