Wednesday 31st March 2021 - 10:15 (BST)
Preliminary estimates from Eurostat have shown EU consumer price inflation is expected to accelerate 1.3% year-on-year over March. It represents the highest level within Europes 19 member states since January 2020 and was in line with market expectations.
The annual core inflation (which excludes volatile prices of energy, food, alcohol & tobacco) missed initial estimates of 1.1% and is now expected to slow to 0.9% over the same month.
Increases in both energy and services numbers were the main drivers as analyst expect an imminent uptick in consumer spending to help keep a lid on runaway inflation over the next couple of years.
The European Central bank has also recently committed to speed up its bond purchasing programme in an attempt to ensure European bond yields were not dragged higher by their U.S. counterparts.
ECB chief Christine Lagarde said earlier this month that rising consumer prices were a result of “temporary factors” linked mostly to the pandemic and would not prompt the bank to tighten its ultra-loose monetary policy anytime soon.
However there has been growing discourse amongst member states regarding the blocs commitment to ultra-low interest rates. Wealthier countries, namely Germany, have the economic capacity to benefit from a higher base rate and are becoming increasingly vocal about it.
