Eurozone price increases refrigerate significantly in March, but core inflation strikes a document high

April 3, 2023:, 2023: In March, Inflation in the eurozone declined significantly as energy prices continued to decrease, while core expenses increased to an all-time high.

Headline inflation in the bloc came in at nearly 6.9% in March, the preliminary Eurostat figures released on Friday. By comparison, headline inflation has increased by 8.5%.

The main cause for this 1.6 percentage point decrease was the drop in energy costs.

Therefore, other parts of the inflation basket remain stubbornly high. Food prices contributed the most to the complete inflation reading for March.

Core inflation excluding volatile energy, alcohol and tobacco prices, increased barely from the previous month. It reached a record of 5.7% in March, from 5.6% in February.

These figures need evidence that the European Central Bank might consider pausing its rate-hiking cycle, which began in July.

“Policymakers at the ECB is not reading too much into the decrease in headline inflation in March and will be that the core rate reaches a new record high,” Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, stated on Friday.

He stated that the ECB would likely keep increasing prices despite the decline in the headline figure.