The decline in inflation in the euro zone stalled in April. In April, consumer prices rose in the 20-country community by 2.4 percent over a year, as the EU statistics office Eurostat announced on Friday, thereby confirming an initial estimate. In March the rate was also 2.4 percent.
Core inflation, which excludes volatile energy and food prices as well as alcohol and tobacco, fell to 2.7 percent in April after 2.9 percent in March.
Since the inflation rate is now close to the European Central Bank’s (ECB) two percent target, there is likely to be a turnaround in interest rates soon. An initial cut in the key interest rate at the upcoming monetary policy meeting on June 6th is now considered likely, provided there are no major surprises by then. The further interest rate path after June, however, is considered to be open.
The differences between the individual euro countries continue to be significant. While inflation in Finland was 0.6 percent in April, Belgium had a rate of 4.9 percent. In Germany, the largest economy in the euro area, consumer prices rose by 2.4 percent in April, as did France.