Eurozone inflation at four-year high of 2% increases pressure on European Central Bank

Sean Gallup  Getty Images

Sean Gallup Getty Images

Euro zone government bond yields edged up on Thursday after inflation in the bloc hit 2 percent for the first time in four years last month, shooting past the European Central Bank's inflation target. Shilen Shah, Bond Strategist at Investec Wealth & Investment, said immediately following the announcement that, "Despite the European Central Bank hitting its 2% inflation target in February, it is likely to remain cautious on the sustainability CPI maintaining this rate". So-called core inflation, which strips out volatile price components such as food, energy, alcohol and tobacco prices, was measured at 0.9%, unchanged from January.

Energy prices were a massive 9.2 percent higher in February than the year before.

"An updated ECB forecast scheduled to be released next week will give an indication of where the central bank thinks CPI is likely to end up".

The inflation rate for the entire euro zone is expected to rise to 2.0 percent in February from 1.8 percent in January, economists polled by Reuters said.

Real Madrid vs Las Palmas
Real Madrid were in the throes of defeat before their talisman scored two goals in four minutes to end the match at 3-3. Barca enjoyed a far more comfortable night against a Sporting side still mired in the relegation zone.

In January, Mr Draghi pointed to a new set of criteria arguing that the return to the ECB's inflation goal must be durable, self-sustained and representative of the euro area as whole. According to a survey of 3,000 companies by data firm IHS Markit, eurozone manufacturers raised their prices at the fastest rate in over 5 1/2 years during February as their costs jumped. Stimulus critics, however, have grown louder as the eurozone economy recovers and inflation nears the bank's goal of just under 2 percent. The lender has slashed interest rates and adopted a bond-buying program worth 2.3 trillion euros ($2.42 trillion) to pump money into eurozone economies.

The ECB is scheduled to run its quantitative easing bond-buying scheme until at least December and has pushed interest rates deep into negative territory to try to stimulate weak growth and hitherto stubbornly low inflation.

The ECB was also "very aware that there are appreciable uncertainties ahead, especially political ones", he said, citing elections in the Netherlands, France and Germany, the Brexit talks and the Trump administration.

As recently as May of last year, consumer prices were below their levels of a year earlier, and the 1% level was breached for the first time in more than three years as recently as December. The figure masks the fact that the number of unemployed people fell by another 56,000 during the month.

Recommended News

  • Bioware Releases New Exploration and Discovery Gameplay Trailer for Mass Effect: Andromeda

    Bioware Releases New Exploration and Discovery Gameplay Trailer for Mass Effect: Andromeda

    The video shows off just how open these worlds are, and how you'll use the Nomad all-terrain vehicle to traverse them. Attaining certain AVP thresholds makes upgrading the Nexus possible and wakes up more colonists from cryo-sleep.

    Northwestern Beats Michigan on Full-Court Pass, Buzzer-Beater

    The point is that the streak is over thanks to one of the most incredible passes you'll see on a basketball court. Northwestern's Bryant McIntosh is now up to 525 career assists, three short of Michael Thompson's school record .

    5th Grader Suggests Tesla Fan-made Commercial Contest

    Right off the bat, Musk's tweet seemed overly optimistic, if not downright absurd. "That sounds like a great idea", he added. Her letter was for a school project, but unlike many letters to celebrities or other figures children admire, it bore fruit.
  • European Union  takes step closer to allowing Ukrainians visa-free entry

    European Union takes step closer to allowing Ukrainians visa-free entry

    The European Parliament will vote on legislative resolution on the abolition of visa requirements for Ukrainian citizens on April 5.

    RSS man announces bounty for Kerala CM's head, gets panned

    While holding the chief minister responsible for the murders, Chandravat said Pinarayi had no right to live in this country. Leader of the Opposition Ramesh Chennithala demanded the arrest of the RSS leader who issued the death threat.

    Palo Alto Networks, Inc. (PANW) Rating Lowered to Hold at Wunderlich

    We should also note their 52-Week High and Low: the shares now trade -29.07% away from their high and 2.52% from the low. Ltd. purchased a new stake in Palo Alto Networks during the second quarter valued at approximately $9,811,000.
  • Chance the Rapper meets with Gov. Rauner on school funding

    Chance said that it went differently from how "it should have". "Springfield is in session next week, so we'll see what happens". Chance was intent on having this meeting because he wanted to talk about Chicago Public Schools (CPS).
    Law Enforcement Searches Caterpillar Facilities In Illinois

    Law Enforcement Searches Caterpillar Facilities In Illinois

    Caterpillar has been subponaed a few times in recent years mainly regarding its relationships with U.S. and non-U.S. subsidaries. Caterpillar shares, which have risen 35% over the past 12-months year, were falling more than 5% in afternoon trading to $93.58.

    It's Pancake Day - so here's a JS Bach pancake, obviously

    Pancakes were an easy way to use up eggs, butter and milk as well as other lngredients such as chocolate, sugar and cream. The average person will eat 2½ pancakes on Tuesday with most people marking the day in some way, according to a survey.
  • Trump Proposes EPA Budget Cuts, Targets Climate, Clean Water Programs

    Trump Proposes EPA Budget Cuts, Targets Climate, Clean Water Programs

    Those states say it's a form of government "harassment" to request methane information from companies producing the commodities. This story also appears in Energywire .
    Georges St-Pierre vs. Michael Bisping booked for UFC middleweight title

    Georges St-Pierre vs. Michael Bisping booked for UFC middleweight title

    He is now riding a career-best five-fight UFC win streak that includes a harrowing victory over Octagon legend Anderson Silva . I want it for my children's sake, for my family, for when I'm retired so we can still live a good life.

    Tamil Nadu: Traders ban Pepsi, Coca-Cola to support local products

    Many super markets located in Chennai and other parts of the state will not take part in the boycott, DNAsaid. Most of the traders were also anxious about the infrastructure facilities if they ban these two brands.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.