The euro zone made up of 20 nations has seen its inflation drop down to 2.4% in the most recent reading. This increases the likelihood of seeing cuts to the interest rate in the upcoming summer. Not only was inflation reported at 0.2% lower than forecasts, core inflation also 2.9% which is below the 3.1% estimate. However, not all is perfect as wage growth has continued to show up in the constant 4% inflation in services.
The biggest economy within the euro zone is Germany which saw its lowest rate of inflation in three years this past month at 2.2%. Experts believe the euro zone inflation rate will fall below 2% at some point this summer, leading to general belief that a first rate cut will be seen in June. Some experts still believe there will be five rate cuts within 2024 even though there are some points of concern that remain within the European economy such as the continued inflation in services and the fall of food prices.
Source - https://www.cnbc.com/2024/04/03/euro-zone-inflation-march-2024.html
2 comments:
What are the consequences of the recent slowdown in inflation in the Euro Zone, particularly regarding potential interest rate cuts and the overall economic outlook for the region?
This is interesting to see, especially due to the political attention behind interest rates in recent news. Even though there are differences between the Euro Zone, perhaps we can start to see the same effects trickle down to the U.S.
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