- Prior +1.7%
- Core CPI +2.4% vs +2.4% y/y prelim
- Prior +2.2%
No changes to the initial estimates with the country breakdown seen below. The main sticking point remains services inflation, which is seen at 3.4% in February. That is up slightly from 3.2% in January, reaffirming more stubborn price pressures in general. Food price inflation was also elevated at 2.5% and has been keeping thereabouts since October last year.
The mix of the two is what is still keeping the ECB very much guarded, even before the latest energy price (natural gas especially) surge in Europe amid the US-Iran conflict. The latest development has now even tilted the balance of the scales in favour of a rate hike for later this year.
For now, the ECB is still dismissing that idea somewhat but you can bet that they will have to keep their options open. That especially not to repeat the same “transitory” mistake that they did back in 2021-22.
