It\u2019s a day before the ECB rate decision and eurozone inflation just dropped to 1.7% from 2%. That sounds more exciting than it is, as base effects in energy have done a lot of the heavy lifting here. Prices at the pump have actually been rising in recent weeks, despite the weaker US dollar.<\/p>\n
At the same time, the continued decline in services inflation to 3.2% from 3.4% in January does indicate that broader softness in the inflation environment continues. Core inflation now stands at 2.2%, which is the lowest reading since October 2021.<\/p>\n
The softer inflation environment is in line with our expectations for inflation to average below 2% for 2026. Nonetheless, speculation about a further ECB rate cut has intensified in recent weeks amid slowing imported inflation, partly driven by a weaker US dollar. Indeed, import prices remain subdued at present.<\/p>\n
Then again, medium-term expectations for inflation have held steady around 2% as more public investment is expected to boost the economy over the course of the year. And indeed, optimism among businesses is on the rise. So, while inflation has dropped below 2%, medium-term inflation expectations are not softening right now.<\/p>\n","protected":false},"excerpt":{"rendered":"It\u2019s a day before the ECB rate decision and eurozone inflation just dropped to 1.7% from 2%. That…\n","protected":false},"author":2,"featured_media":267580,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":{"0":"post-267579","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/267579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=267579"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/267579\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/267580"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=267579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=267579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=267579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}