Inflation in Germany fell more than forecast in March, boosting hopes that the European Central Bank (ECB) will start cutting interest rates.
Consumer prices in Germany rose 2.3 per cent in the year to March, down from 2.7 per cent in the previous month, according to data released on Tuesday. Inflation in Europe’s biggest economy fell to its lowest level since June 2021. Falling energy and food costs and slowing commodity inflation offset an acceleration in services prices.
Economists in a Reuters poll had forecast a slightly higher reading of 2.4 percent for March. Core inflation, which excludes energy and food, fell to 3.3 per cent from 3.4 per cent.
Germany’s figures are in line with those of the eurozone, following last week’s lower-than-expected increases in France, Italy and Spain.
Eurozone inflation figures released today also fell to 2.4 per cent year-on-year.
According to data released today by the EU’s statistics office Eurostat, the slowdown in annual consumer price growth, which was 2.6 per cent last month, reflected smaller increases in food and goods prices, offsetting stable prices for services. Economists surveyed by Bloomberg had forecast inflation of 2.5 percent in March.
Core inflation, which strips out energy and food prices, fell slightly more than economists expected to 2.9 per cent in March from 3.1 per cent in February.
After the coronavirus pandemic and the war in Ukraine triggered the biggest price rises in decades, eurozone inflation has fallen sharply from a peak of 10.6 per cent in October and is now very close to the ECB’s 2 per cent target.
