Another rate cut looms as EU prices ease

Euro zone inflation eased as expected last month and a key measure of underlying price pressures also fell, likely adding to already widespread expectations for another European Central Bank interest rate cut later in April.

Consumer price growth in the 20 nations sharing the euro eased to 2.2 percent in March from 2.3 percent in February, in line with expectations in a Reuters poll, on a big drop in energy costs and slowing service inflation, Eurostat data showed yesterday.

A closely watched core figure, which excludes volatile food and fuel prices, slowed to 2.4 percent from 2.6 percent. That was below expectations for 2.5 percent, a likely relief for the ECB which has long worried about stubborn underlying price growth.

In the United Kingdom, grocery price inflation edged higher in March, putting more pressure on consumers at a time when they are facing several other cost increases.

Reuters