Eurozone inflation continues to slow as energy prices subside: EuroStat

Eurozone inflation slowed to 2.2% in March, driven by easing energy prices, the European Statistical Office (Eurostat) reported on Tuesday.

The figure brings the rate closer to the European Central Bank’s 2% target.

Inflation has gradually eased since a peak in October 2022, following Russia’s invasion of Ukraine, which sent energy prices soaring. The European Central Bank (ECB) has pivoted from hiking interest rates to tackle inflation to lowering them to boost the eurozone’s floundering economy.

‘Strengthens the case for the next interest cut’

Last month, ECB lowered its benchmark deposit rate by a 25 basis point to 2.5%, but President Christine Lagarde warned of risks from U.S. tariff threats and massive German spending plans.

Analysts at investment research group Capital Economics said the March fall in inflation “strengthens the case for the ECB to cut interest rates at the meeting on 17th April”, again by a quarter-point.

In March, inflation in prices for services eased to 3.7% from 3.7% in February, Eurostat indicated. In energy, the rate was negative 0.7%, from 0.2% the month before, while food-price inflation accelerated slightly.

The key measure of underlying inflation—stripping out the effect of volatile energy and food prices—also eased, from 2.6% to 2.4%.

Economists warn, however, that U.S. President Donald Trump’s announcement of sweeping trade tariffs on other countries risks driving inflation up again and curbing growth.

Trump is scheduled to unveil his latest wave of tariffs on Wednesday.