Euro Zone News

Services, food drive euro zone inflation in February

BRUSSELS (Reuters) – More expensive services and food drove euro zone consumer inflation in February, offsetting cheaper energy, data from the European Union’s statistics office Eurostat said on Wednesday.

Eurostat confirmed earlier estimates that consumer prices in the 19 countries sharing the euro rose by 0.2% month-on-month in February for a 0.9% year-on-year increase.

Eurostat said falling energy prices subtracted 0.15 percentage points from the overall final year-on-year reading, while services added 0.55 points and food, alcohol and tobacco added another 0.29 points.

Without the volatile energy and food prices, a measure the European Central Bank calls core inflation and watches closely in policy decisions, inflation was 0.1% month-on-month and 1.2% year-on-year.

An even narrower measure followed by many bank economists which excludes also alcohol and tobacco prices, showed prices rising 0.1% on the month and 1.1% year-on-year.

The European Central Bank wants to keep inflation below, but close to 2% over the medium term but has been struggling for years to increase the pace of price growth.

Reporting by Jan Strupczewski

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