Europe’s inflation decline may prompt ECB rate cut

Inflation in Europe continues to decrease, indicating a potential rate cut by the European Central Bank (ECB) might be approaching. The EU’s statistics agency, Eurostat, confirmed final inflation figures for Eurozone countries at 2.4 percent, with core inflation at 2.9 percent. These values are in line with preliminary estimates and show a 0.2 percent drop from February’s figures. This trend brings inflation closer to the ECB’s target of 2 percent, as noted by Jeppe Juul Borre, chief economist at Arbejdernes Landsbank. He suggests that with core inflation now below 3 percent for the first time in two years, the ECB might consider a rate cut soon, potentially in June. However, Allan Sørensen, chief economist at Dansk Industri, cautions that service price increases are still too high to reduce rates immediately, suggesting a further drop in core inflation is needed before a June rate cut can be justified.